KUALA LUMPUR (April 12): Mah Sing Group Bhd sees the worst to be over for the Malaysian property market as various market indicators appear to have bottomed out with residential property transactions seen to be contracting at a slower pace, while growth in house prices moderates.
“If you look at the house price index, it has moderated to a more sustainable level, from 11.8% to now a single-digit growth of 5.8%, ever since the cooling measures were introduced in 2012.
“At this level, we believe it’s healthy, because we find that people who are buying now are either buying to stay or for investment. We don’t (think) there’s a need for any more cooling measures,” said Mah Sing executive director Steven Ng.
Meanwhile, he noted that the contraction of residential property transactions have bottomed out as transactions declined at a slower pace in the fourth quarter of 2015 (4Q15) compared to 3Q15 and 2Q15.
Ng added that demand for housing is still healthy, especially in the affordable residential segment, and noted that speculative activity is lower now.
“For the affordable residential segment, demand is still very healthy as it outstrips supply. There is no element of speculation. Foreign buyers only account for less than 2% of the total property market transactions, unlike what you see in Hong Kong or Singapore.
“But with the ringgit at this level, we will probably see some investors starting to look into Malaysia,” he said.
Despite the slightly more positive view on the local property market, Mah Sing maintained a sales target of RM2.3 billion for 2016, similar to its target for the previous year, after a revision of its target of RM3 billion set at the start of the year.
“Last year, we revised our target in August from RM3 billion, which was set at the beginning of the year. We were all prepared for the GST (goods and services tax) implementation, but we did not realise the extent of the impact of the slump in oil price and the ringgit on consumer sentiment.
“So we revised the target down to RM2.3 billion for 2015. We are maintaining that target for this year until we see more signs of improvement in the market,” said Ng.
The group is confident of meeting its target for the year despite Mah Sing scaling back its launches in 2015 and 2016, as it still has enough ongoing projects to support its performance for the year, Ng said.
News Source: (Ahmad Naqib Idris)