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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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Icon City |
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?