Demand for affordable landed properties remains strong

Despite the overall slowdown in the property market, demand for affordable landed properties remains strong.

In Q3 2014, Malaysia’s house price index climbed 4.6 percent year-on-year, or its slowest since 2010, mirroring the softer sentiment, showed an AllianceDBS Research Sdn Bhd (AllianceDBS Research) report.

Although the sentiment is more cautious, the research house noted that demand from genuine homebuyers remained robust, on the back of healthy economic growth which is forecasted at five percent in 2015, while unemployment rate is expected to stay at around three percent.

Developers have also been integrating more affordable houses in their launch pipelines, it said.

“Property price have been kept low, by offering smaller built-up units to bring down the absolute price. We believe affordable landed properties with ready infrastructure and amenities remain in demand, which are evident in some of the recent launches.”

Moreover, township developments continue to see warm response from buyers, reinforcing AllianceDBS Research’s view that demand for affordable landed properties is still strong.

Malaysia’s increasing urbanisation, relatively young population and labour force are expected to generate a sustainable demand for affordable homes in major employment centres in the medium and near term, said the research house.

“While cost-push factors are expected to continue to increase inflationary pressure on property prices, especially with the implementation of the goods and services tax (GST) effective April 2015, the impact should be relatively subdued given the more challenging outlook,” said AllianceDBS Research, which pegged a ‘neutral’ view on Malaysia’s property market.

It noted that future property launches may witness slow take-up such as that seen pre-2010, when it took two to three years for projects to be fully sold – a sharp contrast to the sold-out-upon launch experiences during the last few years.

However, AllianceDBS Research underscored that the removal of speculative fervor within the property market will better position developers for a healthier market.

“While most of the developers under our coverage have guided for flat sales this year, we are not bearish on the market itself as the property market has been enjoying a strong surge in sales since 2010. The consolidation will be good for the market as that will weed out more speculative buying.”

Source : http://www.propertyguru.com.my/property-news/2015/4/90251/demand-for-affordable-landed-properties-remains-strong