Property experts say the findings of the Property Market Report 2013, released last week by the National Property Information Centre, came as no surprise, with the various cooling measures having their intended effect of curbing speculation and excessive price growth.
Less certain is whether demand will recover in earnest during the second half of this year, in what some expect to be a “pre-GST boom”.
CEO-Agency of property consultancy PPC International Sdn Bhd Siva Shanker tells StarBizWeek that he sees buyers making a beeline to snap up property in the two quarters prior to April 2015, when the GST takes effect at an initial rate of 6%.
Shanker, who is also president of the Malaysian Institute of Estate Agents, does not believe Malaysia will follow the example of Australia, where prices soared and then tumbled pre- and post-GST back in 2000.
“In Malaysia, what goes up does not come down. I think our property prices will rise ahead of GST and find their level there,” he says.
According to the Property Market Report 2013, volumes shrank 10.9% to 381,130 transactions but their value rose a marginal 6.7% to RM152.37bil from RM142.84bil in 2012, indicating that prices gained strength despite a raft of measures designed to rein in speculation, including a ban on interest-bearing schemes and a higher real property gains tax.
“Most people say 2014 and 2015 will be tough years for the property market. A slowdown usually lasts for two years.
“But looking at the report, my view is that 2013 and 2014 are the slowdown years. I expect the market to normalise in 2015 and make a full recovery in 2016 and 2017,” Shanker remarks.
“This year’s volumes will probably be flat, but prices are not likely to go down.”
As in the past, the report showed that the residential market dominated close to two-thirds of all transactions.
Approvals for housing loans, however, fell sharply compared with an expansion the year before. Total loans disbursed for the purchase of residential properties rose to RM74.4bil from RM64.1bil.
The report says construction activity stayed solid, backed by high-rise and high-end properties in the Klang Valley, Penang and Johor. The shop and industrial segments also saw higher starts and building plan approvals in 2013.
The occupancy rate for retail and office space remained firm, buoyed by a moderate increase in new supply, as well as fewer starts and new planned supply.
But the market showed evidence of softening across the board. All sectors posted reductions in transaction activity, led by commercial and industrial properties.
Most states fared worse save for Johor and Perlis, which recorded high single-digit improvements.
Five states experienced double-digit contraction in activity, with Putrajaya, KL and Kelantan topping the list.
According to the report, residential properties saw improved sales of new launches and more housing starts and completions, which helped pare down the number of “overhang” properties.
The all house price index jumped to 192.9 points against 172.8 points the year before. Average prices rose 10% to RM266,304 from RM241,591.
In terms of volume, most states posted a downturn except for Johor, which expanded 16.6%.
In value terms, all major states saw growth except for Kuala Lumpur, which declined by 9.7%. Johor was most improved with 63.2% growth, while Selangor recorded 2.8% growth and Pulau Pinang, zero growth.
