Malaysia house ownership outlook 2010
As demand pents up, house hunters will likely face higher prices next year. The property prices could increase up to 20 per cent over the next six months. The stock market has made substantial gains this year and this could boost the property sector.
Houses on the secondary market could also be hit by an additional five per cent increase in prices as owners looking to sell try to cover the real property gains tax (RPGT) which comes into effect in January.
On the positive side, interest rates remain low and banks continue to be flush with extra funds, therefore making the arrangement of home financing easier.
There was still a relatively low barrier to home ownership in Malaysia and ticked off a list of factors in the homebuyer’s favour, including interest rates as low as base lending rate (BLR) minus 2.3 per cent; margins of financing up to 100 per cent; zero lock in period; stamp duty exemptions; and repayment periods extended to thirty years or up to the age of 75.
According to Real Estate and Housing Developer’s Association (Rehda), the average value of homes transacted in 2009 is estimated to be between RM200,000 and RM250,000 when excluding low cost homes, and about RM168,000 when taking into account low cost houses.
Fresh graduates, however, could face difficulty buying properties in the city where prices are much higher. There were terrace houses in some suburbs available for about RM400,000, as compared with RM200,000 in smaller towns and cities like Kluang and Kuantan.
Graduates may have a problem without help from their parents. They earn maybe RM3,000 to RM4,000 a month, which means they can borrow only RM150,000 to RM200,000. It is not possible to buy a terrace house with that level of income.
Developers might have to consider building smaller units for the fresh graduate market segment, in the region of 600 sq ft apartments that sell for RM300 per sq ft.
A long term boom is also expected for the housing industry that could put upward pressure on prices as slightly over half of the population is below 24 years of age and would later enter the homebuyers market. These people will be pushing to enter the property market.
