REHDA – Negative and Neutral on property market

I read in The Star that REHDA members are either negative or neutral about the property market. In fact, in a survey done, 87% said so for first half of 2014. This would then drop to 75% for H2 2014. This leaves only the minority feeling positive? The reason? Cooling measures by the government in Budget 2014. It’s president, Datuk Seri Michael Yam said that all the many measures implemented has started to show its effect on the property market.
Besides that, the number of launches for 2nd half of 2013 was also correspondingly lower than the year before. While it does not say what will happen in the first half of 2014 but nearly every opinion in the market is that the first half would be a very quiet period when compared to years before. It further stated that unreleased bumiputera units was the number one reason for unsold units during the period.
From friends in the industry, it is easy to know that slowing down is not just a myth but has been a reality since last year, especially for properties which are deemed above affordability or above RM500,000. Generally, the response for anything below RM500,000 is still ok even if no longer like previously where buying properties was like buying vegetable in the market. Just this morning, an ex colleague told me that one developer who said, ‘I have no issues in selling at a premium’ has started offering a special discount to their buyers. I think this may be a precursor to them launching their 2nd block at a price which is lower than the launching price for first block. The developer has been selling the units since last year and very soon, it should be one year. Needless to say, the price per unit for this particular project is at minimum of Rm750,000 or higher. Let me be frank, when the market slows, you better be selling affordable properties because demand is there but the appetite for RM750,000 units? Muted.
However, not all are negative. When I was playing badminton yesterday night, a friend said that she was trying to buy a landed property in Sri Damansara and the owner had wanted to sell it at RM950,000 just few months ago and now he wanted RM1.02 million instead. Most probably my friend would be buying the unit. She asked if the market is that good. I said, for certain units, the bank valuation has not caught up. Thus it is willing buyer and seller basis. She said, you are right! ‘Hong Leong is only valuing the property at RM880,000!’
Stick to your objective. Buy for stay and can afford? Please proceed. Other than that, perhaps the time has come for you to really evaluate thoroughly before committing. Waiting for 20% drop? The wait continues…
written on 10 March 2014.
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