PETALING JAYA: The residential property segment, a sub-sector of the overall property market, appears to have entered “a cooling phase” in the first two quarters with sales expected to stay “moderate” for the coming third quarter, according to the Malaysian Institute of Economic Research (Mier).
“The macro-prudential measures implemented by Bank Negara to cool down the property market since 2010 look likely to have played a role here,” Mier said.
Mier based its conclusion after doing a residential property survey designed to be an indicator of economic activity in the property sector.
Its Residential Property Index fell for the second quarter to 109.9 points, slipping 1.3 points from the first quarter, and 28.3 points from a year ago.
The survey also showed that total unsold new residential properties have accumulated faster than sales in recent months.
More than a quarter of house builders reported bigger stocks in hand, which is at a three-year high.
The Mier report said that given the built-up in total unsold new units, those surveyed have decided to keep creeping prices at bay by maintaining them at current levels.
But in the months ahead, prices “are likely to escalate again” more than half of those surveyed said while the remainder said they will “neither raise nor slash theirs (their prices) for now.”
Fewer of them increased prices in the second quarter compared with the first and some even offered price cuts, the survey found.
Moving forward, about half of those surveyed expect sales for the current third quarter to remain the same while more than a third of those surveyed foresee higher sales as “home buyers bought ahead of the Goods and Services Tax” which will come into effect next April.
Property prices are envisaged to rise due to higher input costs after that.
Double-storey houses continued to be the most popular while none of those surveyed seem to have sold any bungalows during this same period.
The survey concluded that affordability issues may continue to haunt the market if property prices outpaced income growth and interest rates edged up.
“Housing demand may eventually lose ground,” Mier said.