Affordability, rising prices still a concern

KUALA LUMPUR: Affordability and rising house prices remain a major concern among 55% of Malaysians surveyed, who are looking to buy a property within the next six to 12 months, according to the Asia Property Market Sentiment Report (H2) 2014.
The report is based on an online survey conducted by iProperty Group, which was carried out between June 5 and July 8, involving 5,295 respondents in Malaysia.
According to the survey, 74% of respondents are interested in buying a property with 53% being investors and 21% being first time homebuyers.
However, 67% of respondents said they did not make any purchases in the first half of 2014 due to property prices being too high while 36% said they did not have enough money for a down payment.
Other reasons include not being able to find affordable property (36%), waiting to see what measures will be announced in Budget 2015 (24%), banks making it too hard to qualify for home mortgage (18%) and lack of good financing options (16%).
Almost half (45%) of respondents felt that loan applicants should be offered loans on a case-by-case basis.
iProperty Group Ltd managing director and CEO Georg Chmiel speaking at the release of the report said the government should look into providing incentives to developers for affordable housing and provide infrastructure in areas where there is no connectivity.
"Then, affordable houses will be able to be generated because you can enlarge the supply of properties that are suitable for people who have to commute," he told reporters at a briefing yesterday.
Chmiel said addressing affordability and infrastructure issues would ensure property remains affordable to the population and property prices grow at a reasonable rate.
The survey also showed that a majority of respondents are looking to buy in Selangor (82%) and Kuala Lumpur (78%) while 25% are planning to buy in Putrajaya.
On the planned budget, 53% are looking for properties below RM500,000 while 33% are looking for properties within the RM500,001 to RM800,000 range.
Only 8% had budget for the RM800,001 to RM1 million range and 5% are looking to buy within the RM1 million to RM3 million range.
More than half (55%) of respondents felt that the GST will affect their purchase decision as they (85%) believe that it will increase property prices. However, 41% said the GST will not stop them from investing in property.
Chmiel said that since the Budget 2014 regulations came into effect, property buyers have been treading carefully and adopted a wait-and-observe stance for the first half of 2014. He opined however that this is something which is going to change in the second half, with a more optimistic outlook.
"Malaysia's robust domestic demand will remain crucial to maintaining its forward momentum. A stronger property market is expected for the second half of 2014, but the latest overnight policy rate is expected to put more pressure on housing affordability amongst Malaysians," he added.
Factors that will drive the residential property market include a young population and labour force, increasing urbanisation and general inclination to own a house.