/// East Malaysia Property News
Second-Hand Properties to See Higher
Demand: MIEA
Property Agents See Housing Market
Picking Up Later This Year
Luyang, Kota Kinabalu, Sabah
Malaysian Institute of Estate Agents (MIEA) president Siva Shanker (pic)
says that once people get used to the negative publicity, the market
will find its level in the second quarter
Due to the abolition of the Developers
Interest Bearing Scheme (DIBS), the
secondary residential property market
will shine brighter than the primary
market segment in 2014, according
to the Malaysian Institute of Estate
Agents (MIEA).
Moving forward, Malaysia’s residential
market in 1H 2014 is expected to be
sluggish due to government’s latest
property cooling measures. However,
it is expected to pick up steam in
the second half, particularly for the
secondary market.
Without DIBS, in which the developer
pays the interest of a buyer’s loan
during the construction period, the
appeal of newly launched projects
has lessened. Notably, the scheme
was disallowed by the government
in Budget 2014 as it promotes
speculation.
But the most pressing issue for the
property sector next year would be
the introduction of the goods and
services tax (GST) in April 2015, which
could create another round of price
hikes.
On the other hand, second-hand
properties could see better demand
this year thanks to their cheaper
prices.
“More people are expected to snap
up secondary properties as they are
generally 30 to 40 percent cheaper
than newly launched projects,” said
MIEA President Siva Shanker.
In 2012, newly launched projects
only accounted for 20 percent of all
the residential property transactions,
while the rest were second-hand
homes. And this year, that proportion
is expected to dip to 15 percent.
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“If the government starts educating
the public on GST now, the market
should react favourably to the new tax
system,” he added.
Malaysia’s property market is
expected to grow at a slower
pace in the first half of the year
before picking up again, the
Malaysian Institute of Estate
Agents (MIEA) predicted.
The government introduced
measures including a hike in
property gains tax and caps
on the length of mortgages in
order to curb speculation in
the property market.
“I think the second two
quarters will see the market
finding its level, people getting
used to the negative publicity.
The kneejerk reaction will be
over,” MIEA president Siva
Shanker told reporters as MIEA
released its outlook on the
property market.
By 2015, prices could even rise
by 10 to 15 per cent, he said
but added that the number of
property transactions may be
dented when the new Goods
and Services Tax (GST) starts
in April.
“The only problem there being
the hiccup which may be
caused by the imposition of
GST on April 1 (2015),” he said,
saying that it was hard to say
if the public would react badly
to it.
Alex Ting, a committee
member of Sarawak MIEA who
was also present at the news
conference, be lieves property
prices will rise when the GST
rolls out in April next year.
Despite residential properties
being exempt from the
new consumption tax, Ting
said the prices of building
materials would rise and force
developers to pass on the cost
to buyers, noting that cement
and bricks’ prices had recently
gone up in Sarawak.