Malaysian Housing Shortage in 2013?

SOFOs

A property company is predicting a shortfall in residential properties in 2013?

Do you believe him? What are the premises for his deduction and conclusion?

His rule of thumb-every year an average of 110,000 new units of houses enter the market. This apparently did not occur in 2012 due to some salient factors. Instead, possibly only 65,000-70,000 units came in, leading to a shortfall of 35-40%.

Of the many reasons he ponied up was developers hesitate on their launches. Because they feel investors were taking a longer term view of the market as stricter lending guidelines firstly confused and then started to bite.

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His concern: "The shortage will be felt next year…when we will run out of properties to sell next year on the secondary market."

The realtor said that the new guidelines imposed by Bank Negara Malaysia had resulted in slow transactions for residential properties in the first half of 2012, which will take at least about six months to recover.

He added, "At the end of the first six months of the current year, bankers started to realise that they were not hitting targets. Also (by then), buyers began to understand the guidelines better," he said, and transactions thereafter began to pick up in the second half.

MIEA president, Nixon Paul said residential property prices are unlikely to fall next year, but may stay at their current level. So, that would be good as the bubble may be prevented from bursting any time.

He said, "There is a misconception in the condominium market where many clients feel it will crash, that they cannot rent out (their units) or there is an oversupply.

"Those highly geared and dependent on rental income to pay their mortgage will definitely be affected but generally, prices are holding," he said. So, watch out o n these weak holders. You may get a bargain on the fly.

Paul added however that many sellers have holding power today and most investors are no longer "flipping properties", but instead taking a longer term view before selling their properties.

"Instead of buying and flipping (to profit in real estate), most investors are holding on to their properties for five years before selling."

Paul also said that most sellers today will not sell unless they get the price they want, therefore property prices are unlikely to fall. So it continues to be a seller's market?

So, that is their take.

Do you agree?