News: Slight Increase In Property Sales No Relief For Multiple Property Owners

May 16, 2019

 

Despite the property market’s small improvement last year, an expert warns that the worst is not yet over for people having a hard time finding renters or buyers for multiple properties, reported Free Malaysia Today.

According to chartered surveyor Ernest Cheong, the combination of the US-China trade war and the battered stock market will likely cause many to hesitate from buying property.

He revealed that in fact, he has four clients with multiple properties who are now struggling to acquire returns during the property glut and tough economic climate.

“I have one client with around six properties. He can only get renters for three of them, earning him around RM20,000 per month.”

“But he has to pay back at least RM60,000 to the bank each month because these are expensive, high-end properties.”

He added that those who can financially hold on to their properties would likely see a return on their investments, although the waiting period is still unknown.

“There is little the government can do because many simply cannot afford homes at their current prices, or they cannot get home loans.

“Some incentives like stamp duty exemptions may help a bit. But for those who are overcommitted, they have to bite the bullet and sell their properties for a much lower price to those who are waiting for a fire sale.”

On the other hand, Henry Butcher Malaysia chief operating officer Tang Chee Meng believes that investor confidence, the rising cost of living and loan approvals are still the main challenges in the sector.

He noted that residential property sales have been on the rise since the Home Ownership Campaign’s launch in March, with purchasers apparently taking advantage of the discounts and stamp duty exemptions offered.

Read More: House price trends in 4 key states in Malaysia

Tang expressed caution, however, at the US-China trade war’s effect of making potential house purchasers more cautious.

He is also unsure whether the small rebound in interest in the market for residential property can be sustained if the economy and global stock markets are negatively impacted the trade war.

Tang suggested that Putrajaya could help in the situation by looking into ways on how to lower the development costs, such as compliance and land costs.

“This is so that house prices can be kept at levels which match the income levels of the people,” he said.

 

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Herman Leng
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RMG Property
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