We’re almost into the third month of 2018, and there is still plenty of ongoing discussion about affordable housing, oversupply of luxury and commercial properties, difficulty in obtaining housing loans, and rent-to-own schemes, just to name a few hot topics. Following last year’s interview with Mah Sing Group’s CEO on the property outlook for 2017, we decided to get our 2018 property outlook from a different perspective, so we headed out to get opinions about the property scene from everyday folks like you and me.
Here’s what they have to say to Estate123.com about their views on the Malaysian property sector in 2018, along with some personal comments and predictions on residential and commercial properties in the country.
Nina, 28, marketing executive in Petaling Jaya:
“I believe the rental market in Malaysia will improve, as millennials opt to rent instead of buying property for greater flexibility and convenience.”
Residential: As demand for affordable properties continues to grow, buyers will consider areas further away from town but with good connectivity via public transportation. On the positive side, rental will be cheaper in these areas, but on the flip side, commute time will be longer and will require good planning for last-mile connectivity between residential areas and public transport stations.
Commercial: Co-working spaces have become increasingly popular, because they provide a comfortable place to work, not to mention present good networking opportunities among professionals. With most co-working spaces located within easy reach of LRT or MRT stations, it will increase demand for office space in central areas.
Yong, 34, IT manager in Shah Alam:
“I don’t foresee the property market will burst like what people have been expecting since last year. In fact, property developers will continue to offer good packages to encourage more property sales.”
Residential: Investors will continue to invest in residential property. With the rise of Airbnb, we will see more serviced apartments and condo units being snapped up quickly during launching, especially in hotspot areas. The disruption in our local property rental market, thanks to Airbnb, could potentially encourage more buyers to consider this method of short-term rental instead of the conventional monthly rental format.
Commercial: Mushrooming of commercial projects in areas outside the Klang Valley might be a concern, as investors still prefer to invest within the Klang Valley and Greater KL area. We also see the growth of e-commerce, where more businesses don’t need to have a physical shop for their business unless it is already established and the business owner plans to expand to brick-and-mortar stores.
Joseph, 45, business owner and investor in Kuala Lumpur:
“Although the rate hike and oversupply are obvious challenges, there are still gems to be found in niche market segments, especially education.”
Residential: During the era of rate hike and oversupply, finding a good yield is particularly difficult when the past monetary easing policies worldwide has pushed capital appreciation. However, residential properties surrounding popular primary and secondary schools will continue to attract long term buyers or rental income from families with children.
Student Accommodation: Residential properties close to private colleges and universities will see high rental demand from both local and foreign students, as Malaysia is well-known for quality and affordable tertiary education. Malaysia’s multi-cultural, English-speaking, and friendly society are also key factors attracting students pursuing higher education.
Commercial: Due to oversupply of offices and the rise of e-commerce and mobile office activities, the demand for commercial properties in the long run will continue to be a challenge. I believe demand will concentrate around areas surrounding TRX, as foreign MNCs are attracted to setup their regional offices. Besides that, commercial properties linked to MRT stations will be a priority and able to have a lower vacancies rate and shorter vacant period. The Chinese government’s “One Belt One Road” initiative strategy will likewise spur demand but might take some time to mature.
Mike, 50, property investor in Kota Damansara:
“Whatever the economic situation, if you are financially literate, it is always a wise decision to buy property and wait, rather than wait and buy property!”
Residential: We notice that property is no longer just a home to buyers. People don’t buy a property just because it protects them from stormy weather, or because of proper utilities and good road infrastructure. We think it is always more than the basic stuff. Buyers are more ‘real’ now. Developers must adapt to buyer preferences and be more creative and trendy in both design and marketing of their projects.
Student Accommodation: We realise that the student rental market segment is growing fast. Is it because of growing population only? Human nature of continuously wanting to compare and compete has resulted in an abnormal growing emphasis on higher, and better, education. We strongly believe that this will naturally lead to a steady demand for student accommodation for many years to come.
Commercial: There are many commercial properties that are doing well. At the same time, we saw many are struggling to rent out. Why is this so? We strongly feel that having a clear understanding of business trends and relevant experience in selecting the right location for a commercial property are two very crucial factors to achieve higher ROI.
Got an opinion on the property market? Feel free to share with us in the comments, or drop by our Estate123.com Facebook page for more updates! 😉