Market to consolidate in 2014.3

THE EDGE WEEKLY ISSUE#995

THE WEEK OF DECEMBER 30, 2013 – JANUARY 5, 2014

City & Country Section

LOCAL CONSULTANTS’ POLL: By THE CITY & COUNTRY TEAM

TANG CHEE MENG
CHIEF OPERATING OFFICER
HENRY BUTCHER (MALAYSIA) SDN. BHD.

Outlook

With the announced cooling measures, the market will soften in 2014.  The value and volume of transactions are expected to decline.  However, prices are unlikely to drop although there will not be a rapid price increase as seen over the past four years.  This is because the drop in transaction volume was greater than the drop in value in the first nine months of 2013, so average prices did not drop as a result.  We expect to see the same thing in 2014.

Landed residential properties are expected to enjoy stronger demand than high-rise residences and more developers will refocus some of their energies on the affordable homes market segment.

Investors should restrategise and look at areas with strong rental demand, as they should not be aiming for rapid short-term capital gains anymore.  At the very least, investors would be able to enjoy a good cash flow to help cover their mortgage repayments while waiting for prices to appreciate to levels that will motivate them to sell.

Medini Iskandar would be a good target in Johor.  In KL safe bets would be future growth areas along major infrastructure projects such as stations along the Sg. Buloh-Kajang MRT line and new proposed highways such as Damansara-Shah Alam Highway, Kinrara-Damansara Expressway, Serdang-Kinrara-Putrajay Highway and the Sg. Besi-Ulu Klang Elevated Expressway.

Established areas near the city with good public transport and amentities and where prices have not yet reached stratospheric levels would also be good areas to look at.  They include Cheras, Bukit Jalil and Wangsa Maju.

Wish list

• The government to adopt policies that recognise the difference between each state and different categories of buyers; and
• While banning DIBS is good for the property market in the long term, the government should consider giving first-time house buyers below a certain income threshold access to DIBS to make it easier for them to own houses.