So at the end of each year we come to that same old property forecast for the following year position when experts try to predict the property market for the following year. Well judging by the looks of it, the time has finally arrived.
Free Malaysia Today posted an interesting article about the first ‘battle’ between Deputy Finance Minister Lee Chee Leong and a real estate expert, mr. Ernest Cheong about the Malaysian property forecast for the year 2018.
Judging by mr. Ernest Cheong property market in the year 2018 will be terrible and could lead to a market crash due to the lack of financial capacity to own properties and cover for their monthly instalments. In his own words:
The panic (within developers and house owners) might start after Chinese New Year in February or later if the government decides to pump in money to strengthen the market.
The reaction is based on Deputy Finance Minister Lee Chee Leong’s statement that the completed residential units rose by 40% to 20,807 units in the first half of 2017 compared with the same period last year. He added that the units were worth RM12.26 billion with condominiums and apartments costing over RM500,000 dominating the unsold homes in Malaysia.
Mr Cheong stated that the RM12.26 billion Deputy Finance Minister was refering to is only from the primary market, which includes launches by developers. It does not include the secondary market, which is house owners seeking to sell their homes.
Mr Cheong mentioned the fact that homebuyers nowadays are allowed to pay much less for a deposit for a property as opposed to before. This leads to his conclusion that the developers are in a very desperate need to sell out the properties they own as there is no demand. Mr. Cheong added:
This is where the danger starts. I predict if this continues, markets will crash within 24 to 30 months because consumers do not have the financial capacity to buy properties any more. (…) Furthermore, developers who started building two years ago are expected to flood the market further with their units. (…) So about RM16 billion of properties are waiting for buyers. But there is no demand. The reason is that people don’t have the money,” he said.
Based on all the given info mr. Cheong suggests to all the property buyers to wait and save their money untill the better time for property investments come.
To find out more, check out the full report from the Free Malaysia Today Article here.