By Admin | Published on : Jan 23, 2018 12:28 am
KUALA LUMPUR, Jan 23: The total transaction value for residential properties in Malaysia rose 2.6 per cent to RM49.8 billion or a RM1.3 billion gross profit despite a drop in sales volume last year, indicating profit for developers despite their lower sales.
Data by the Valuation and Property Services Department showed transaction volume dropped 6.1 per cent between January and September 2017 compared to the same period in 2016.
In real numbers, the sales of residential units dropped to 142,493 compared to 151,671 in the previous year. In value term, the total transaction value for 2016 amounted to RM48.5 billion.
“I don’t expect the value to go down for 2018,” Nordin Daharom, the department’s director-general, told reporters after presenting the data at the 2018 Malaysian Property Summit here today.
The increase in sales value meant some developers profited from the inflation of house prices even as the number of sales dropped.
Property prices in major urban centres nationwide shot up almost threefold for the last six years due to excessive speculation made possible by easy credit.
Bank Negara Malaysia (BNM) eventually stepped in to tighten regulation on lending. While the cooling measure may have helped weed out speculators, prices of existing stocks remained stubbornly high.
Just three months ago, the central bank warned that home prices are “severely” unaffordable for most of the population.
But Foo Gee Jen, president of the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia (PEPS), said developers are finally heeding complaints.
“I think overall the market will rebound in 2018 and we will see a general decrease in value [prices] as more developers are going into the RM350,000 and below segment,” Foo told reporters.
For urban areas, houses below RM350,000 are considered “affordable” by most developers although BNM and state-backed think tanks like Khazanah Research Institute have argued otherwise.
BNM in the same report published last November said a house price can be considered affordable if it is only 3 times the median multiply of a worker’s basal income.
At the moment, there is an undersupply of houses priced below RM350,000 while there is a serious overhang in properties priced above that range.