Ripe for the picking

Where to buy: Properties in good locations, ie within a 30km radius of Kuala Lumpur, will be in high demand. — Photos: Filepics

It’s still a good time to buy property in Malaysia, say the experts.

PROPERTY analysts say 2017 will continue to be a buyer’s market as prices will not be increasing as steeply as they once did.

According to legal firm Chur Associates founder Chris Tan, the next 10 years will be very interesting for the property market because Malaysia is in its last lap towards reaching developed nation status.

Tan, who specialises in real estate, says property prices moving forward will not be like in the previous decade, when they went up by leaps and bounds. Although prices will still rise, the increase will not be as drastic as before.

“I personally think property prices will not go down. There is plenty of supply but new products will not be cheaper. Prices will be maintained or will go up because of the increased cost of raw materials, coupled with a weak ringgit and inflation,” he says.

Tan also thinks property will still be a safe investment choice due to the legal protections provided.

“One of the reasons why you can buy and invest in property is because you have legal protection. Real estate is one of the best protected investments.

“If you are a homebuyer purchasing a property to (live in), you will not find a better time to buy because all our policies and laws are consistent in this last lap of Malaysia becoming a First World, high-income country,” he says.

And as Malaysia moves closer to being a developed market, it will see more subsidised and public housing like in Britain, Hong Kong and Singapore, he adds. Home buyers will also receive more protection compared with investors or speculators.

“Policy-wise, we are moving towards that. The federal and state governments are also competing against one another to provide affordable housing,” he says, adding that this trend will likely continue for years as housing is considered a basic necessity.

Interestingly, Tan says that property management will be a key determining factor on whether buyers eventually settle for a property.

“We have gone past only looking at what facilities are provided. Moving forward, property management will become increasingly important. It is no longer a game of who has the most features such as swimming pools or gyms but which property has lower management fees.

“As the years go by, the cost of maintenance becomes higher and higher. So if that’s the case, you should give this due consideration,” he adds.

The way Malaysians approach buying property must also change with the times and financial environment, says Tan.

“Moving forward, property investment should be a collective effort. You should learn to hunt like a lion, in packs, and not alone like a tiger. Most of the loans approved are to joint borrowers.

“Often, single-income households cannot take care of the housing repayments,” he says.

Tan adds that this is also the time when younger buyers can leverage on their age to get housing loan approvals.

Chris Tan: ‘Prices will be maintained or will go up because of the increased cost of raw materials.’

And in the next few years or so, Tan predicts that strata will be the new Malaysian way of life.

“Moving forward, chances are that the property you’re going to buy will be one with a strata title, both for landed and high-rise properties. Previously, we used to hold the idea that ‘My home is my kingdom’, but strata is about community living,” he says.

Tan explains that the national education syllabus has not yet incorporated the idea of good strata living conduct, which may cause problems within a community that lives in close proximity.

“We have not been educated on how to live in a strata property. For example, there are those who do not contribute to sinking funds or monthly maintenance funds. No-one tells you about the implications if you do not attend the neighbourhood AGMs (annual general meetings).

“There is a lack of awareness, and that mentality must change. Civic studies, or Pendidikan Moral, must teach Malaysians how to live in a condominium,” he says.

As the consumer sentiment index (CSI) is still below the optimum threshold, MIDF Research property analyst Alan Lim also believes that property prices for 2017 will stay flat.

“Things are better compared to the last quarter, but people are not optimistic about the outlook of their income and job security,” he says.

According to Lim, at least the first half of 2017 will continue to be a buyer’s market as it has been for the past three years.

As Malaysia moves closer to being a developed market, we will see more subsidised and public housing, like this PR1MA housing complex in Putrajaya.

As for popular purchases, affordable properties in relatively good locations will be in higher demand compared with high-end units.

A good location, he says, would be within a 30km radius of Kuala Lumpur.

“Relatively high-end properties with a price tag above RM1mil will be less in demand compared with affordable properties.

“This links back to the CSI. Consumers are generally not optimistic yet. As a result, people are not willing to commit to big ticket items,” he says.

As for the rental market, Lim predicts that rates will stay flat or see only a slight increase.