Malaysia real estate market to face challenges in 2019: CBRE WTW

With outlook subdued for property sectors, industry analysts are hoping economic fundamentals will improve and housing policies are righted

The Malaysian property market is likely to remain soft across all sectors this year, according to CBRE WTW managing director Foo Gee Jen via the New Straits Times.

“We have experienced slower property market since the last few years and this will remain more or less the same this year,” Foo told reporters gathered for the consultancy’s 2019 Asia Pacific Real Estate Market Outlook Report today.

Foo ended his prediction on a positive note, however, with the hope that the “economy will grow faster and cost of living will decrease while consumer spending rises”.

The consultant also looks forward to a higher level of governance with the regime change. “There will be more systematic and planning for townships built in addition to proper infrastructure to go with it,” he said.

The property overhang in Malaysia hit 30,000 units last year. Take-up rates for unsold units in high-rise residential developments and high-end products have decelerated. In Johor Bahru alone, high-rise residences have seen vacancy rates topping 50 percent for the first time this year.

Foo lauded the government’s plans to build one million affordable homes over a 10-year period, beginning with 100,000 units this year. However, he waxed cynical on the cross subsidisation policy, saying that the government appears to have been pandering to the B40 income group to curry favour with voters ahead of the elections.

“We do need to get the housing policy right. We should not put this entirely on the private sector because if it is fully driven by them then there would be heavier cross subsidy to the M40 group,” Foo said.

“What would happen to the M40 group? If there is too much cross subsidy then the M40 will suffer and they too will not be able to afford homes,” he added.