Slowdown in property launches in Malaysia

Property launches and sales will soften this year, as the market gravitates towards the actual impact of the 2014 budgetary measures, property consultants concur.

Managing director of property consultancy VPC Alliance Malaysia Sdn Bhd James Wong said with the cooling measures in Budget 2014, sales volumes would drop and the property market would soften, particularly the sales of condominium prices ranging from RM750,000 to RM1mil, which are targeted at foreigners.

He said property launches were expected to slow down compared with 2013 and some launches might even be delayed or scaled down, if effective demand was not there.

Wong expected more affordable homes to be introduced this year, with properties near the proposed mass rapid transit and light rail transit extension lines set to be popular.

“Although the landed residential sector is expected to be resilient with stable growth, especially property within gated and guarded enclaves, sales of residential properties to foreigners would be slow as a result of the budget measures. Transactions in condominiums would slow down, with a possible price correction.

“The abolition of the developer interest-bearing scheme (DIBS) and other freebies is expected to reduce the volume and value of the transactions in the primary market, and new property launches may be affected, as without the DIBS, many potential housebuyers may not be qualified to purchase houses. Overall, the housing market would moderate, with a reduction in property transactions and prices,” Wong said.

According to CB Richard Ellis Malaysia executive director Paul Khong, the minimum RM1mil limit for foreigners would affect the mid-range residential sector, and potential buyers would tend to defer their decision to buy. The imposition of the full real property gains tax will have a blanket effect on curbing speculation across all sectors and impact the take-up rate.

“It has been a quiet start this year and most developers are deferring their launches till the later part. With the Chinese New Year coming up end-January, it is traditionally a quiet period for the property sector. More project launches are expected to come through in or after the second quarter,” Khong observed.

After a relatively quiet first-half and the market finding its equilibrium, he said more action was expected in the second half of the year.

He pointed out that developers would have to work harder this year to attract sales, and many might consider marketing their projects overseas and incorporating innovative and lifestyle concepts into their projects.

“Good and innovative packages plus value-for-money features in property projects would go far in 2014,” Khong conceded.

He said one of the property hotspots would be Medini@Iskandar where new projects like I Medini Walk (by Singapore’s Tang Group of Companies) and Avira (Eastern & Oriental Bhd) both near Legoland would be entering the market soon.

Many developers will be looking at the Medini area, as it is a special international zone with various taxes/benefits, including an exemption of the RM1mil minimum price limit imposed on foreigners. - By Angie Ng (The Star)

No comments