Latest Government Cooling Measures Can Help Stabilise Property Market
of their children when there are
favourable interest rates.
PROPERTY CLUBS
“Bulk buying by a group of property
buyers under property clubs can be
disruptive only when they feed on
rising prices. If such clubs are more
investment orientated and are highly
transparent about their operations,
I see no harm in them,” Fernandez
observes.
Bulk buying creates artificial demand
in the early stages of a project’s
launch and usually involves high- rise
residential strata properties where
supply is high
There are many ways to stabilise the
residential property market and the
latest measure by the Government to
curb bulk buying is a step in the right
direction to ensure a more equitable
market that is led by real demand.
Urban Wellbeing, Hou ing and Local
s
Government Minister Datuk Abdul
Rahman Dahlan said developers
selling more than four residential
units to a single buyer or group
must now obtain prior approval
from the Controller of Housing.
The new enforcement would be
made compulsory in all real-estate
advertising and sale permit materials.
Property consultants gave their
thumbs up to the move aimed at
reigning in property speculation and
flipping activities for fast gains.
Property consultancy Khong & Jaafar
managing director Elvin Fernandez
says the curb will in the medium
to long term help to stabilise the
housing market. “It is very good that
these measures have come out. Bulk
buying has been misused and the
current intended curtailment to limit
such buying to four units is good.
Bulk buying by speculators with
the intent of flipping and crowding
out genuine buyers is not healthy,”
Fernandez says.
He says bulk buying can distort the
market when speculative groups of
buyers signal to developers demand
which in fact is not real demand in
the market. However, Fernandez
believes bulk buying is a good thing
if it is done for genuine reasons such
as parents buying houses for each
VPC Alliance Malaysia Sdn Bhd
managing director James Wong
discloses that bulk buying are mostly
done via property investors club
and by foreign buyers from China,
Singapore, Japan and South Korea.
“They are mostly financially strong
and are interested to buy in strategic
locations with public amenities such
as projects nearby to MRT stations
and LRT extension lines, which
usually have higher opportunities
for capital appreciation. Bulk
property buyers normally have the
financial muscle to buy in bulk to
get good pricing and discounts, and
they usually go for properties of
RM500,000 or more.”
Wong contends that bulk buyers of
properties are indirectly providing
shadow banking financing for
projects and assisting developers to
fast-track the required sales target
for bridging loan drawdown.
the early stages, the stock available
to the market quickly dries up and
it creates a rush and a buzz for the
balance units which sends the unit
prices rocketing further. This also
sets the tone for prices in the next
launch,” Khong explains.
COOLING THE MARKET
Due to the high number of units
booked, developers would be willing
to offer more discounts to push sales
and pare down their risks.
The property clubs are used to
bring in quick sales by offering good
discounts prior to the actual launch.
Developers can get their sales
numbers high from the start and
prices will rise even higher.
Khong says the curb on property
bulk buying to reduce unhealthy and
excessive speculation in the market
needs to be closely monitored and
has to be enforced effectively to
ensure a fine balance prevails in the
market.
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