SABAH PROPERTY NEWS
2015 To Be A Good Year For
Property Players
P
roperty consultants
believe that 2015 will be a
good year for buyers and
investors, as the property
market is expected to correct
itself in terms of pricing due to
the various cooling measures and
implementation of GST. As reported
in Property Guru online, Raine
& Horne International Executive
Director, Lim Lian Hong said that
property buyers and investors will
have more choices in 2015.
“Properties in the long
run are always good
investments and a hedge
against inflation. At
the current moment,
our ringgit seems to be
weakening and property
may be a way of preserving
the value of your savings,”
said Lim. “On the other
hand, there will be more
choices coming into the
market and you may get
a good buy if you are
patient,” he added.
Zerin Property CEO, Previndran
Singhe stated in an interview that
2015 would definitely be a buyers’
year due to various affordable
housing schemes which will provide
first time buyers with more options.
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The Burden Of Households
K
Kuching, Sarawak
“This would result in developers
becoming more prudent and
creative in their product offering
and pricing, catering more to
middle and upper class buyers
where the demand lies,” he added.
He said market conditions this
year will also attract more foreign
inv estors especially Singaporeans
who will be driven by the
weakening ringgit. According to
Previndran, the first quarter of
2015 will see a hike in property
transactions as buyers rush to
buy properties, especially nonresidential properties, to avoid the
price increase associated with GST.
In response, more developers will
rush to complete their projects
before April 1, 2015.
“The commercial market, especially
office space leasing, is expected to
feel the impact of falling crude oil
prices which would affect the oil and
gas industry,” he said. Post GST, the
property market will remain flat with
lesser transactions and property
launches in the second quarter as
both buyers and developers adopt
a wait-and-see approach to assess
and evaluate the impact of the
GST before starting to experience
nascent recovery in the second half
of the year while 2016 will witness
strong growth in the property
market,” he added.
hazanah Nasional Bhd
recently rolled out an
unflattering report on
the state of Malaysian
households. The study found that
74% of Malaysian households earn
less than RM6,000 per month and
house prices in general have gone
up beyond the affordable levels
of most households. A household
with a RM6,000 monthly income is
unlikely to be able to afford a home
costing more than RM400,000. The
commonly accepted definition of
affordability is three times median
income, but Malaysia’s houses on
average cost much more than that.
“In median income terms, our
houses are more expensive
than those in Ireland and
even Singapore. At 21%, the
profit margins of our property
developers are high – almost
2 times those of the US (12%),
1.2 times those of the UK (17%)
and higher than Thailand (14%),
although Singapore has higher
margins (25%),” the report said.
“Over and above their usual
expenses, households also have to
make loan installment payments,
which are approximately 18% of
their income at current interest
rates. The recent hike in interest
rates has increased the monthly
loan installment for households by
2% and they remain susceptible to
further interest rate rises,” it added.
The study’s conclusion was
reinforced by the national
household income survey
(HIS) data on individual income
registered with the Employees
Provident Fund (EPF) in a joint
paper released earlier by the
University of Malaya (UM) and
Khazanah Research Institute.
According to data provided by the
EPF on employees’ total income,
74% the active EPF members earn
less than RM6,000 per month.
About 55% earn less than RM4,000
per month and 23% of its active
members earn less than RM2,000
per month.
“We obtain evidence of steadily
rising earnings inequality in both
private and public sectors in the
2000s,” said UM department
of development studies senior
lecturer Dr Lee Hwok Aun and
fellow author Khazanah Research
Institute director of research Dr
Muhammed Abdul Khalid.
“Property sales also show
rising concentration in
the upper rungs,” they
noted on the development
of luxury buildings, and
pointed out the top 10% of
property buyers controlled
more than 40% of the
total value of property
purchases in 2011, up
from 35% in 1997. The
share of the bottom
20%, however, hovered
at just below five percent
throughout that period.
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