Following the unprecedented freeze on approvals for shopping malls, offices, serviced apartments and condominium over RM1 mil in Malaysia, Asian Property Review finds out what lies ahead.
A spate of negative comments on the 2018 outlook of the Malaysian property market and the government’s temporary suspension of all approvals for new shopping malls, offices, serviced apartments and condominium projects above RM1 mil beginning Nov 1, had elicited varied responses from market experts and commentators.
A myriad of factors had converged to cast 2017 as possibly the worst ever year for the Malaysian property market. Tight controls in financing, capital controls from China, growing oversupply and negative sentiments have resulted in prolonged sluggish sales with very few exceptions.
Worse, citing more incoming supply, Moody’s Investor Service has even predicted the situation will worsen over the next 5 years with a sharp decline in prices. It predicts the large incoming supply of retail and office space will raise vacancy rates across Kuala Lumpur, Penang and Johor to about 30%. It also believes that suspending new property developments would not correct the oversupply situation over the next five years.
Now that all the bad news is out, could this mean 2017 has reached bottom and 2018 will be the turning point?
Some experts seem to think so.
Citing his earlier forecast that 2018 will be a good investment year especially for Kuala Lumpur City Centre, investment consultant Dato’ Sri Gavin Tee affirmed his earlier forecast that there will be some hotspots emerging in 2018. “2017 was the bottom; but we will see the market picking up in 2018. Although in general, the whole of Malaysia may experience slow sales, some hotspots throughout the country will see increased demand,” he told Asian Property Review recently.
In particular, he singled out 2 types of property that will continue to attract investors’ attention: