Property market yet to pick up
09/04/2007 NST By David Yeow
Developers say people don’t want just any house, they want a home. A quality
environment that will guarantee profit when resold.
KUALA LUMPUR: Sluggish, flat and dry. These three words, property dealers
say, sum up the current state of the local property market.
Gone are the days when the queue in front of sales offices would start the
night before a launch with buyers clenching cheque books in their fists and
praying hard to secure a property for themselves.
According to the National Property Market Status Report, as of the second
quarter of 2006, there are 22,185 units of unsold residential property.
"The property market has changed. It’s an investment market now," said VPC
Realtors Sdn Bhd director James Wong.
He said the decline in property sales was due to the quality of the
property.
"People don’t want just any house, they want a home. A quality environment
that will guarantee profit when resold," he said.
Wong said the reason for the decline in property sales was partly due to an
oversupply of low-range property, with a combination of factors like poor
location, price inflation and lack of facilities.
Real Estate and Housing Developers Association chairman Ng Seing Liang said
the current property market had an excess supply of the wrong types of
property.
"There are a lot of properties in the range of RM250,000 that are not
selling because people think there is no long-term value in them," he said.
Ng said the stagnation was also caused by a lack of first-time buyers.
"Currently, a lot of young working adults cannot afford to buy anything
above the range of RM350,000," said Ng, who believed that sales would be
stimulated if the government were to set up a fund to help first-time
buyers.
Similarly, he said the government’s doing away of the real property gains
tax (RPGT) from April 1 was a move in the right direction.
However, Patrick Yap, a financial planner with American International
Assurance, disagreed, saying the problem stemmed from the fact that the cost
of living had increased but the average wage had not.
"An average housing loan is a 30-year commitment with a repayment of close
to RM1 million including interest payments. Considering the uncertainty of
world economics, it is just too much for young adults to complete their
loan," he said.
Yap said the economy needed to see a long-term boost before property sales
could bounce back.
Property surveyor Knight Frank Newmark Global executive director Sarkunan
Subramaniam, meanwhile, feared that the removal of the RPGT would induce
property speculating to reappear.
"The tax was introduced in 1967 to curb property speculating. When it is
removed, unscrupulous parties will take advantage of the vacuum resulting in
the return of property speculating," he said.
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