Festive fun is in the air, with further frivolities in store this Yuletide season as Malaysia looks forward to welcoming the New Year with a bang!
But what can domestic rah-rah real estate fans and property passionistas look forward to in 2019, following on a year of dampened demand and oppressive overhangs in residential supply?
Read on, dear PropSocialites, for a peek at the Spirit of Property Future - in the style of the classic holiday jingle, The Twelve Days of Christmas!
1. On the first day of Christmas, the PropSocial sifu said to me: Think twice when looking at that high-end property.
Developers and home seekers alike are turning away from the luxury segment, with unsold residential units in the range generally rising every year. Affordable and mid-range are in - good news for first-time homebuyers everywhere!
2. On the second day of Christmas, the PropSocial sifu said to me: Transit-oriented developments - something everybody loves.
Property prices around LRT and MRT stations are growing.
Despite the uncertainty and cancellation of infrastructure projects like the HSR and MRT3, Klang Valley’s integrated rail network is still growing, and taking the prices of surrounding properties with it. Why not benefit from the pattern?
3. On the third day of Christmas, the PropSocial sifu said to me: Prices may decline or stagnate as general trends.
Property gurus and nerds across the board have seen price adjustments, or at the very least, reduced growth, in their crystal balls - though many agree the worst is over.
4. On the fourth day of Christmas, the PropSocial sifu said to me: Property bubbles are for the birds.
While doomsayers are quick to proclaim disaster, strict financing guidelines to date by Bank Negara Malaysia have put the brakes on rampant speculation, making a bubble unlikely in the domestic market.
5. On the fifth day of Christmas, the PropSocial sifu said to me: Beware of RPGT and other icky things.
Budget 2019 brought with it increased RPGT and stamp duties.
Introduced in Budget 2019, property owners must pay 5% RPGT when selling in or after their sixth year of ownership. Harsh, but funds to cover that RM1 trillion shortfall have to come from somewhere, no?
6. On the sixth day of Christmas, the PropSocial sifu said to me: Players in the commercial space will be praying.
Oversupply in the residential segment is bad enough, but office and retail are facing severe occupancy challenges as well. Operators will need to stay up to date and innovate to remain competitive. All this is good news for renters, though!
7. On the seventh day of Christmas, the PropSocial sifu said to me: No, seriously, prospects for high-end properties are thinning.
As if the 5% RPGT increase wasn’t bad enough, properties worth more than RM1 mil will be subject to 1% more stamp duty. If you don’t need to worry about that extra 1%, the PropSocial sifu would like to learn from you!
8. On the eighth day of Christmas, the PropSocial sifu said to me: Innovative financing to be the in-thing?
Property crowdfunding, online sales and virtual marketing, oh my! But are all these buzzwords or business boons? Something tells us good, old-fashioned bricks and mortar is still the way to go for property purchases.
9. On the ninth day of Christmas, the PropSocial sifu said to me: Property investors will be dancing.
Dramatic visualisation. Do not try at home.
For those with the leverage (meaning $$$), this is a very good time to buy, with developers offering attractive packages to address unsold stock - such as Sime Darby Property Bhd’s rethinking of its pricing strategy and Eco World Development Group Bhd’s upcoming HOPE campaign.
10. On the tenth day of Christmas, the PropSocial sifu said to me: The property market will keep on spinning.
Historically, property price growth in Malaysia is slowest in the year following a general election. In line with the industry’s cyclical nature, cautious purchasers and investors need only wait for better times to come.
11. On the eleventh day of Christmas, the PropSocial sifu said to me: It never hurts to have some backup planning.
Even with a positive domestic outlook, Malaysia may be affected by recessionary global trends or regional credit crunches. If you’re not on steady financial footing, it may be best to postpone that property purchase in favour of building emergency funds for a rainy day.
12. On the twelfth day of Christmas, the PropSocial sifu said to me: Merry Christmas and a Happy New Year!
We had something property-related for this, but wanted to end on a festive note :) To all our readers, be safe, do your property homework, and let’s have an even better 2019!
(By: Aliff Yusri, 27 Dec 2018)
