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Property sector set to stabilise but Omicron may pose challenges

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Speakers at a virtual property discussion are cautiously optimistic about property sales next year, with one speaker saying now is a good time to buy.

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Free Malaysia Today
Prices for new properties are expected to increase next year as a result of rising building material costs with developers passing the costs down to buyers.

PETALING JAYA:
The property sector is expected to stabilise, if not witness a gradual recovery in the first half of 2022 versus a year ago although the discovery of the Covid-19 Omicron variant will pose some level of uncertainty, PropertyGuru country manager for Malaysia Sheldon Fernandez said.

How the sector fares next year would hinge on how Malaysia deals with it, Fernandez said at the PropertyGuru Virtual Panel Discussion: 2022 Property Market Outlook today.

“We expect to see a gradual improvement in the first half of 2022, which will pick up in the second half. We anticipate that if it is not a recovery, at least it is a stabilising of the sector,” he said.

Another speaker, Knight Frank deputy managing director Keith Ooi said there was a need to “take very small steps cautiously” in order to see what was around the corner. “No one has a crystal ball. No one has the mid- or long-term view. But it should be better moving forward,” he said.

On whether now was a good time to buy, Ooi said it was because prices had started to rise again after bottoming out. Also, interest rates were low, the lowest ever in the Malaysian lending sector.

He expects prices “to inch up” as a result of rising building material costs because housing developers will pass the costs down to buyers. There is also a pent-up demand as overall sentiments turn positive but he cautions against overleverage.

“The key takeaway is this: Do not buy for the sake of buying. Never overleverage.” He said buyers should look at property as a 10-year or so investment.

Malaysian Institute of Estate Agents (MIEA) president Chan Ai Cheng said sentiments were improving but the problem was buyers wanted to buy way below market value while sellers wanted to hold on to their pricing.

”MIEA is asking sellers, do you really need to sell? Because the seller will not get the optimum price. If he can hold on, that property will serve as a hedge against rising building material costs and inflation,” Chan said.

Buying a property, she said, was a medium- to long-term investment and should never be looked at on a short-term basis.

She said MIEA expected inflation and the cost of building materials to continue to rise next year.

Meanwhile, talking about the broader macro property outlook, Fernandez said he saw some key trends impacting 2022.

The first is the need for a stable market, which, coupled with job security, will help to put money back into pockets.

The second is the need to revive various programmes like Malaysia My Second Home (MM2H) to boost the sector.

The third is the need for inclusive and progressive policies. For example, he said, the gig economy has provided a new avenue of employment.

“There is a need for more progressive and inclusive policies to meet the needs of a changing landscape as the country moves from the Covid-19 pandemic to its endemic phase,” he added.

He also said the government should not discontinue the various mega projects as these would help to enhance Malaysia’s future prospects.

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