Property Guru: Asking price down in Q4 2017

PETALING JAYA: The PropertyGuruMarket Index, which tracks the asking price of homes in Malaysia, continued to fall by 1.6% in the fourth quarter (Q4) of 2017 compared with a 0.2% decline in the third quarter.
On a yearly basis, the prices contracted 3.7%.
Save for June, February and October, all other months in 2017 showed a decline in asking prices across all classes of residential properties.
The index is derived from PropertyGuru’s proprietary data, which includes (but is not limited to) the asking prices of over 250,000 residential property listings on its website.
PropertyGuru Malaysia country manager Sheldon Fernandez cautioned on greater downward pressure on asking prices as unaffordability continues to be a major issue.
“While desire to transact remains strong, most property buyers – about 67% can only afford homes priced between RM300,000 and RM500,000. In addition, PropertyGuru data shows that three out of four Malaysians believe the market to be oversupplied. Hence, many buyers are opting to adopt a wait-and-see approach, especially with talk of general election throughout 2017,” he explained.
Nonetheless, he said the declining trend is consistent with prevailing market sentiments and that the ongoing price correction is healthy for the residential sector in the medium and long-term.
“The declining trend has been evident throughout 2016 and 2017, so it’s no surprise. Importantly, it has been gradual so there are no significant shocks to the market, and both buyers and sellers can adjust themselves accordingly. Declining prices usually co-relate to improved consumer satisfaction. In fact, our last consumer sentiment survey showed consumer positivity towards the real estate sector has improved,” he added.
However, certain key locations across all four property epicentres have experienced price stability or sellers are still able to relatively maintain their price offerings.
“In the Klang Valley, these would be Sentul and Bangsar. Up north, Balik Pulau and Tanjung Bungah in Penang have remained comparatively stable.”
In Johor, although prices have largely been on an uptrend, popular locations such as Nusajaya have seen prices decline slightly in Q4 2017, while emerging hotspot – Gelang Patah shows upward price movements.
“This is probably due to consumers searching for homes in alternative areas compared to the established areas of Nusajaya, Johor Baru city and so on. However, given that Johor prices have been on a high for a while, on a year-on-year basis, prices are still holding,” said Fernandez.