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Friday, February 28, 2014

MIEA: 2014 not bad year for property mart

Publication: NST
Date of publication: Feb 25, 2014
Section heading: Business Times
Page number: 016
Byline / Author: By Muhammed Ahmad Hamdan

KUALA LUMPUR: THE year 2014 will not be a bad year for the property market as perceived by many amid tighter policies and regulations imposed by the government, said Malaysian Institute of Estate Agents (MIEA).

Its president, Siva Shanker, said the positive outlook is supported by several significant factors, including a healthy economy backed by strong domestic consumption and investment inflows.

"A lot of people think we are into a bit of a contracting market this year, and they worry that 2014 and 2015 are going to be terrible years, which I disagree," he said at a briefing on the 2014 property outlook, here, yesterday.

"I think the actual slowdown in the property market started in 2013, which means that we've already seen one barrier... We are all still here and we did fairly well," he added.

Siva said property sales are expected to be higher this year than in 2013, which saw a drop of about five to 10 per cent compared with 2012.

He said residential properties, which accounted for about 64 per cent of total sales in 2012, will continue to be the main driver of the property market this year.

Nevertheless, the market will see a consolidation in the first half of the year as it is still in a bit of a tailspin after the budget announcement and is adapting to the changes caused by the policy adjustments.

"The market is still learning to adapt with changes such as the abolishment of DIBS (Developer Interest Bearing Scheme) and the implementation of a higher real property gain tax.

"We will see the market finding its level, people getting used to all the negative publicity, the perception finding its own level, the knee-jerk reaction will be over and there will be a slight improvement in the second half of the year," he added.

Siva said other supporting factors include low interest rate and property prices, lower exposure to international ups and downs, young demographics and a market shift from primary to secondary.

"With the removal of DIBS and all the extra freebies that have been thrown in the packet for a long time, the market will clearly shift towards the secondary market, where you can purchase properties at 60 to 70 per cent the price of the brand new launch," he said.

"The young population will grow and form new households to fuel further demand in the longer run. Generally, in the long-term perspective, we have a lot of potential to grow because we are not an ageing population," he added.

Siva said the market will begin to rise in 2015 with estimated growth of between 10 and 15 per cent. The only hiccup may come from the imposition of the goods and services tax (GST) in April 2015.

"If we start the education process now and teach the public that it's not a big deal and other taxes will come down, then I think the market will react fairly reasonably to the GST," he said.

"(The year) 2015 will see a slow and steady rise, which is good for us because we don't want to see huge dramatic growth to be led by another dramatic fall... our opinion is that 2016 will see another property high," he added.

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