10 FACTORS WHY HOUSE PRICES CAN BE MORE SUSTAINABLE IN MALAYSIA

Jan Yong explores several factors that can bring property prices in Malaysia to more sustainable levels.

As a result of restructuring measures by the new government which took over on May 9th, many people expect the pent-up demand for property to spike by next year causing prices to increase. Here are 10 arguments to the contrary:

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The National Property Information Centre (Napic) 1Q2018 property market status report released on June 22 showed that there were a total of 144,927 unsold residential units under construction and those that haven’t started construction yet. For completed residences, including serviced apartments and small office, home offices (SoHos), the total was 34,532.

Add to this is the recent announcement by the Ministry of Transport (MoT) which plans to develop affordable housing projects on Railway Assets Corp’s (RAC) 9,192 acres of land to generate better returns for the company.

On the same note, China’s Agile Group has said that it is planning to launch projects in Malaysia with GDV of RM12.6 billion in the next three years (presumably high end projects).

Furthermore, the new government has in its manifesto, pledged to build 1 million affordable houses within 2 terms (10 years). Whether this is achievable or not is not an issue – the big concern
is its impact on the market. It will add more supply to the affordable housing segment especially those below RM500,000.To meet demand where it’s most needed, many private developers are also aiming to go into that segment.

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