In December 2015, Malaysian property investor Dato’ Sri Gavin Tee, who is also the founder and president of Swheng Tee International Real Estate Investors Club, predicted that the country’s property market will start to boom in 2018. According to Tee, the local market will reach its peak between 2018 and 2020 before it enters a mature phase, which is expected to be sometime between 2025 and 2030. A matured stage means plenty of places have been urbanised and developed, like the Iskandar Region in Johor.
In terms of current market performance, the renowned property consultant said 2016 is the worst time for the local property market compared to the past eight years. That said, the market would start to recover and get back on track in 2017, according to Siva Shanker, who is also an expert in the Malaysia property market. Due to the local property market being a cyclical industry, 2017 will be the year for the market to rise again gradually. In other words, 2017 is the year for recovery, and the market will reach its peaks in the following years to come.
These are some buyer’s tips if you’re planning to buy a property and secure a housing loan in Malaysia:
- Secondary properties sell lower compared to the primary market According to real estate experts, compared to the primary market, secondary properties that have been completed for less than five years sell at 5-10% lower. If the property is even older, say 10 years and above, the prices would drop and sell at 20-30% lower compared to the primary market price. For example, a newly developed condo can fetch RM1 million, while a similar condo in the same location could only sell at RM700k-RM800k if it’s 10 years older.
- Bigger gaps in second tier market Secondary properties in the second tier market, such as Kajang, Sungai Buloh and Klang, are also selling at 20-30% lower compared to the primary market in the same location.
- Direct purchase from developers allows for easier financing and greater cost savings Buyers who purchase properties directly from developers have the chance to get financing easily and save more in costs.
- Timing is the most important factor, not location When it comes to property investment, timing is the most important factor and not location, according to experts. Purchasing a property at the right time could give you a great deal, perhaps not immediately but in time. Connectivity and proximity also play a role.
- Watch out for the ‘Rail Revolution effect’ With the MRT, the High Speed Rail from Singapore to Kuala Lumpur, and the LRT Line 2 and 3 within the Greater Klang Valley area in development, there are bound to be opportunities hidden in properties near these rails that are too good to pass up, causing what experts described as the ‘Rail Revolution effect’.
- Commercial properties in suburban townships will see higher prices Commercial properties in suburban townships such as Bandar Utama, Damansara, Puchong, and Bangsar South will see a rapid rise in terms of price compared to similar properties in other locations, which will see a slow movement.
2017 is the recovery year for Malaysia’s property market. Consider the buyer’s tips mentioned when deciding whether it’s the right moment for you to purchase a property. Check out the four different home loan packages by OCBC Bank that suit your needs and budget.