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PETALING JAYA: Local demand for high-end condominiums is expected to weaken within the next 12 months, primarily in the Kuala Lumpur City Centre (KLCC) area, with more developers anticipated to tap foreign markets.

Jones Lang Wootton executive director Malathi Thevendren said the projection is based on the mismatch in the level of pricing by developers with local affordability. 

"Supply coming in must match the demand level as there are not many people who can actually afford to buy the high-end condominiums. 

"Some developers are even holding back their launches...(as) they know there's no market," she told Bernama on the sidelines of the 17th National Housing and Property Summit 2014 on Wednesdat.

 

Malathi is a member of the Royal Institution of Chartered Surveyors and Registered Valuer and Estate Agents with the Board of Valuers, Appraisers and Estate Agent, Malaysia.

She has more than 25 years experience in real estate professional services. and was a speaker at the two-day summit organised by the Asian Strategy and Leadership Institute (ASLI).

For affordable condominiums, Malathi said demand will see steady growth with young couples and professionals continuing to drive the market. 

"People's preferences are still for landed residential properties. But because house prices have escalated over the past two to three years and way beyond the affordability level, many can't afford to own such landed property," she added.

She noted that market prices of most existing high-end condominiums are expected to be stable over the short-term, while prices of low to medium end condominiums at more popular locations, may see some appreciation.

For new launches, prices are likely to increase in line with inflation and construction costs for labour, utility and new materials.

On supply, Malathi said it would see moderate growth with infrastructure, transportation improvements and condominium acceptance areas further from the city. 

"With the expected slower demand and cost increases, developers are expected to maintain unit quantum prices, while reducing built up areas. 

"Going forward, creating a sustainable property market, as well as the mismatch in supply and demand, will be among the challenges for the industry," she added. - Bernama


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KUALA LUMPUR: With various stringent measures currently in place, developers will have greater competition in terms of product offerings and pricing, said See Hoy Chan Holdings director Tan Sri Teo Chiang Kok.

Kok, who is also Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) chairman of construction, property and infrastructure committee and deputy secretary-general, said developers will need to be more creative and make adjustments accordingly to attract buyers.

Cooling measures, such as doubling the real property gains tax (RPGT) from 15 to 30 per cent for properties sold within three years of purchase, removal of the developer interest bearing scheme (DIBS), a lower loan-to-value ratio and a RM1 million floor price for foreign investors have softened the housing market in recent months.

These measures are meant to curb spiralling home prices but they have taken a toll on the overall property market.

Preliminary findings of the Real Estate and Housing Developers’ Association (Rehda) Property Industry Survey showed that the market is softening and there are fewer launches taking place in the first six months of this year.

Members reported that sales in the first half of this year has dropped as compared to the second half of last year.

“We are supportive of the government measures but all that, including the implementation of the six per cent Goods and Services Tax (GST) in its present form, will hurt the whole construction industry,” Teo told Property Times.

He urges the government to release the brakes and re-look at some of its cooling measures to help ease the burden of property developers, contractors, suppliers and buyers.

According to him, between 30 and 35 per cent of house buyers currently get their loans rejected for properties in all price range.

“All these have cut off a lot of people from buying properties. Banning DIBS altogether will also put pressure of the high acquisition cost on genuine buyers, including first-time buyers and Bumiputera buyers,” Teo said.


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PETALING JAYA: The Urban Wellbeing, Housing and Local Government Ministry will propose the setting up of a fund to buy landbanks in strategic locations for low-cost housing projects in the 2015 Budget.

“I want to ask the prime minister and the Finance Ministry to consider providing funds to buy strategic landbanks in urban areas for the purpose of building low-cost and affordable housing,” said its minister Datuk Abdul Rahman Dahlan.

“Sarawak is doing it and Johor is looking into it. I am finding it increasingly diffficult to find good strategic locations to build our PPR (Projek Perumahan Rakyat).”

Speaking after the launch of the 17th National Housing & Property Summit 2014, here, Rahman said he plans to build one million affordable homes by the end of 2017. 

Under the Perumahan Rakyat 1Malaysia (PR1MA) scheme in the 2014 Budget, the government allocated RM1 billion to build 80,000 houses costing 20 per cent below the market price.

In the first quarter of this year, average house prices have risen by eight per cent, compared with 10.7 per cent in the first quarter of 2013. 

As at August 1, as many as 52,893 applicants have registered under the MyHome scheme, while 51 developers have applied to build 12,038 units under 55 projects.

Rahman also said the build-then-sell (BTS) policy should be made voluntary, instead of being mandatory, from January next year.

“Throughout the years, we have done a lot of studies on this issue. Some property developers have been doing this on their own, but we noticed that the challenges are even more for the smaller developers because they do not have the financial muscle, such as getting favourable rates from the banks,” he said.

However, National House Buyers Association (HBA) secretary-general Chang Kim Loong disagreed, saying the sell-then-build policy will allow developers to abandon housing projects after receiving full payments.

“Our proposal, which the government has agreed to, is to implement the BTS, and where the buyer pays a 10 per cent initial payment and settles the rest after the utilities are installed.”

Chang also said smaller developers should build within their own means to prevent abandoned projects.

 


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