A major concern was the escalating oversupply situation in both the residential and commercial space, while at the same time, sellers were struggling to secure sales due to the prevailing weak economic environment.
KUALA LUMPUR: The property market will continue last year's downtrend following the uncertain economic scenario including the slowdown in the Chinese economy, said the Valuation and Property Services Department, Ministry of Finance.
Director-General Datuk Faizan Abdul Rahman said although the property sector may see some moderation in market activity, the slowdown would still be manageable especially for the residential sub-sector driven by the supplies of affordable housing projects.
"We expect to see a price correction and slow growth in the house price index due to the supply of affordable housing by both the public and private sectors.
"MyDeposit Programmes and other on-going government initiatives and incentives, as well as, the recent revised overnight policy rate is expected to slightly improve the property market sentiment," he told a press conference at the Malaysian Property Summit Mid-Year Review 2016.
He said, overall, property prices remained higher but at a lower rate, causing property developers to launch less projects.
Faizan also said that the house price index has steadily declined since 2012.
In 2012 and 2013 the house price index was double-digit but it had gone down to single-digit in 2014 and 2015.
In the fourth quarter of 2015, the index fell 0.8 per cent to 7.2 per cent from 8.0 per cent in the same period in 2014.
The retail market on the other hand, would likely moderate as cautious consumer spending sentiment lingered in the light of increasing cost of living.
"The office sub-sector is expected to plateau. The impact of mega projects such as the Tun Razak Exchange and Menara 118 is yet to be seen as they are at their initial stage of construction.
"Given the ample supply of office space, the authorities are cautious in the approval of new projects," Faizan said.
He added that on-going and near completion infrastructure projects such as the Light Rail Transit and Mass Rapid Transit would provide the catalytic effect for the property sector.
Asked on the outlook for the property market next year, Managing Director Datuk Siders Sittampalam said it would depend on the global economy.
"There are various projects that the government has planned under the 2016 Budget and the infrastructure is already there to boost the economy.
"However, the outlook for the property market is moving forward but it will still depend on the global market," he added. - Bernama
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