INDUSTRY EXPERTS
Warrick Singh

Director of Business Development/Training of Asian Realty Sdn Bhd, Asian Land Auctioneers Sdn Bhd/Starfish Training Sdn Bhd 

As we move into 2016, the ‘cloud of uncertainty’ hanging over the Malaysian economy would settle somewhat preceding several recent capital measures, such as the purchase of Malaysian bonds, intra-trade in Chinese Renmimbi instead of US Dollar and the offer of RMB50 billion of a protected Chinese capital market.

Also, the development of the LRT/MRT lines which enhances connectivity to Greater Klang Valley including Seremban, Rawang and Klang will bode well for the residential and commercial property market. Malaysia generally has a young population where 80% of Malaysians are below the age of 50, which means the demand for houses is only going to increase as more young adults come into the workforce and are looking to settle down.

Seremban with improved roads and rail connectivity as well as within reach of Kuala Lumpur would see considerable activity growth in the residential segment especially for newly launched gated and guarded residences.

Besides that, educational hubs such as the Alice Smith School in Seri Kembangan, Selangor; Epsom College at Bandar Enstek, Nilai, Seremban and Bandar University Pagoh near Muar, Johor would see a fair amount of investments to develop these townships into  “holistic developments”.

Similarly, the commercial sector will “piggyback” on the spin-off of these new growth areas as when there is substantial population, commercial properties will automatically attract investors, both passive and speculative.

2016 appears relatively promising for the average Malaysian hence, quite a few would now be shaking off the ‘wait and see’ stance adopted last year.  Moreover, the  substantially weakened Ringgit will see many foreign investors utilizing the opportunity of the higher exchange rate to pick up residential and commercial properties.
Khalil Adis

iProperty.com‘s brand ambassador (Iskandar Malaysia) property speaker and author   

This year’s primary residential property market will be driven by affordable homes as outlined in Budget 2016. With RM200 million allocated under the First House Deposit Financing Scheme which will be established by the Ministry of Urban Being, Housing and Local Government and RM1.6 billion to be spent to build 175,000 units of PRIMA homes, we can expect this sector to dominate 2016 as housing is a basic necessity that needs to be met.

The Kuala Lumpur residential property market will be a challenging one this year due to a medley of factors – the falling ringgit, political uncertainty, the property market’s cooling measures and the oversupply issue. Prospective investors must tread with caution while those who are already in the market must find solutions to counter the challenges ahead. Also, the expatriate market is dwindling as many foreigners have turned to other ‘greener pastures’ in Asia.  Property sellers are advised to set realistic asking prices and even be prepared to sell at a loss. For buyers, there are plenty of good deals in the market. Auction properties are on the rise and from an investment point of view; these are attractive for the following three reasons:

1. They are undervalued, translating to savings.
2. These units are completed and might only need minor renovation.
3. Should you decide to rent them out, high rental yields could be obtained.

The commercial property market will be better off this year. Properties such as hotel suites and retail units will be popular investment choices as they provide a regular rental income. Whereas, the secondary market for commercial properties will be driven by institutional investors who are looking to buy office space in the heart of KLCC where such units are in limited supply. It will be a challenging time for the office market with there being fewer expatriates as potential buyers. On the flip side, this means that buyers and renters could obtain good deals as quite a few sellers and landlords will be in desperate need to sell off or rent out their property. Hence, this would be a good time to start stating your terms and agreements!
Gary Chua

CEO of Smart Financing

This year’s property market will continue to be soft especially with the challenges we are facing both internally and externally. This year will see a high volume of new properties, with many residential and commercial properties  being completed. It will take some time for the demand to catch up to the impending supply of properties, hence the bearish market.

The property market dynamic in the country will continue to experience the revolution where more Malaysians are now favouring value-added properties, especially lifestyle properties. These properties are equipped with facilities and are surrounded by amenities, which allows for a more comprehensive and comfortable lifestyle. With most young urbanites searching for work-life balance, the lifestyle living concept is fast gaining a foothold in the country.

This lifestyle concept was not really introduced before and thus, there may be a lack of supply of such developments. As Gen-Ys is the biggest population group in Malaysia, where it comprises 10.8 million or 38.2% of the Malaysian population,  the demand for lifestyle properties will continue to increase in the near future as many will begin to look for a place of their own to settle down.

The most challenging facet in 2016 will be securing mortgage from banks. Financing is only going to get tougher, be it for first-time house buyers or for property investors. This is because banks are currently facing a high asset to deposit ratio on top of the weakening Ringgit and higher banking costs. All these translates to less funding available as banks will be tightening their reins even further to ensure that they obtain the best and safest return on investments.

On the bright side, the uncertainties in the market could result in emerging good deals, which would not be present in an otherwise healthy market. As it is a ‘buyers’ market now, developers  are willing to offer discounts to entice purchasers. It might be challenging to secure financing from the bank but knowing and preparing ahead will keep the savvy investor at the top of the game  as well as allowing for the accumulation of greater wealth in a weak market.
Chang Kim Loong 

Honorary Secretary General, National House Buyers Association (HBA)  

The primary property market is expected to experience a further drop in sales volume. With the current economic climate, more financially-savvy working professionals will adopt a wait-and-see attitude, especially if developers continue to sell at the current steep prices. Banks will also embrace a more prudent financial checks and as a result, applicants in the borderline category who got their loans approved during better economic times will not be as lucky this year.

Even though developers are not expected to reduce selling prices; they may offer more ‘freebies and rebates’ to entice new house buyers.  Developers with deeper pockets will probably defer further new launches as they wait for the economy to recover. Thus, it can be expected that the 2016 primary property market will see fewer launches.

On the other hand, the secondary property market (sub-sales) is bound to be more exciting this year. With the economy showing no signs of improvement, property speculators who entered the market when the Developer Interest Bearing Scheme (DIBS) and so-called Zero Entry Cost (ZEC) systems were still in place, will be greatly affected.

In consideration of some of these property speculators not being able to afford to service their mortgage instalments upon completion of said properties, they will be compelled to sell off their units. With more secondary properties entering the market, some of these speculators may have to settle for selling prices that are lower than the original purchase price in order to secure a buyer.

For those who are unable to flip their properties, however, will eventually default on their loans and in turn, banks will be forced to auction off their properties – that is why HBA foresees an increase in property auctions in 2016.

HBA has always advised aspiring house buyers to take to heart the adage ‘Buy what you can see and not a pie in the sky‘ by taking advantage of the secondary properties and auction properties available in the market. They should make an effort to hunt for ‘hidden gems’ as there are good properties that could be obtained at a bargain.
Khoo Boo-Khuan 

Full-Time Property Investor & Author of “The 9 to 5 Property Millionaire”

I believe that the residential property market is going to be relatively stable this year. It will always be a resilient sub-sector of the market as housing is a basic need and people who need a place to live will continue to purchase properties.

They may not be able to buy exactly what they want, but I do believe that most purchasers will be content as long as they are able to buy a house of their own that is within their budget.

However, the primary market will not pick up much unless developers start launching products that are more affordable to the masses. As it was seen last year, while there were many new launches that received lukewarm responses, there were some launches that did amazingly well as the developers had their products well positioned.

The secondary market is where most of the excitement is going to be. Prices in the secondary market are much more reasonable, which makes it more attractive to house buyers and savvy investors. Another plus point is that less guesswork is involved when buying in the secondary market.

The fact that you can view the property “as-it-is, where-it-is” enables you to make better judgements on how good a property is as of today.

For the commercial property market, I do foresee that it will be quiet in general. This is because many businesses have adopted a “wait-and-see” approach and will focus more on business continuity rather than expansion during these challenging times. In a nutshell, 2016 is definitely going to be another challenging but exciting year for the property market.

 

Adrian Wee

Founder of www.idkingacademy.com

It will definitely be a very challenging year ahead, especially after the Chinese New Year celebrations. However, with each challenge lies opportunities! One has the option to adopt the wait and see strategy depending on how they perceive the property market to be half glass full or half glass empty.

There are always queries by property buyers of when will be the best time to purchase a property and the best advice to them will be to buy now. The bargaining power is still strong in the Malaysian property market and buyers can effortlessly build their net worth as well as their assets if they invest for the long-term because investors always ‘win’ in the long run.

In regards of what types of property to buy this year, it is all about asset selection. Depending on the stages and the cash position buyers are in, active buyers and investors alike can opt for undervalued assets. However not every property is suited for everyone and not every other bargain is suitable for every stage in life.

Properties are a double edged sword where it can cut and harm you, but it can also make you wealthy effortlessly. It is important to equip ourselves with the financial fundamentals as well as investment intelligence. I predict that the interior design and renovation industry will be a game changer this year as not only can it add value to properties, but it is also because the property market will be slowing down.

Knowledge is power and if we mastered such intelligence, anytime is a good time to purchase properties. Property investment is a long term game, and investing into long term markets will guarantee you great returns.

DEVELOPERS
The questions posed to developers were:

1. What is the outlook for the property market in the next 12 months?
2. Which areas/states and what kind of properties do you think will garner strong interest and demand from property buyers in 2016?
3. What advice would you give to property home buyers and investors in 2016?

Read more at http://focus.iproperty.com.my/buying/566/malaysia%E2%80%99s-property-market-in-2016-what-to-expect–predictions#6vZ0d1KewcRt6J6Y.99