Property prices to cool down next year but remain unaffordable

Despite stronger economic and industry fundamentals, property players expected 2018 would likely be another challenging year for the real estate sector.

PropertyGuru Malaysia Country Manager, Sheldon Fernandez said, though overall consumer sentiment has improved and asking prices have come down, key themes like price unaffordability, overhang of high-rise homes, rising living costs, tight financing and other factors will have a dampening effect on the overall momentum next year.

“Higher Gross Domestic Product (GDP) does not necessarily mean higher wages and disposable incomes for the B40 and M40 segments.

“Properties remain out of the reach for many Malaysians due to the gap between asking prices in both the primary and secondary markets and consumer affordability,” said Fernandez who moderated an hour-long discussion during PropertyGuru 2018, a property outlook forum held here on Wednesday.

He added, for 2018, properties are expected to remain unaffordable at 4.4 times the median income in Malaysia and the number would be even higher in key urban locations such as Kuala Lumpur and Penang.

Meanwhile, PropertyGuru in a statement said, Malaysia’s real estate market is still correcting itself, evidenced in the slow but steady downward moving trend line.

“For 2018, asking prices of properties will remain stable with the possibility of marginal drops for real estate in Kuala Lumpur, Selangor and Penang.

“On a national level, the PropertyGuru Outlook report indicates a 0.2 percent decrease from Q2 2017 to Q3 2017. On a year-on-year comparison (Q3 2016 to Q3 2017), asking prices were slightly lower at 2.3 percent.” said the statement.