Following the unprecedented events of the last couple of years, the country appears to be on the right track to recovery as we move into the endemic phase. However, uncertainties linger and businesses still need to adapt to the new normal, says CBRE | WTW chairman Foo Gee Jen.
Foo will be speaking on the topic “Looking Ahead: What to Expect in the Next 12 Months” at The Edge Malaysia RealTalk 2022 forum on July 16.
The annual property forum (formerly known as The Edge Investment Forum on Real Estate) is making a comeback after two years. This year’s theme is “Investing in Volatile Times: How, What, Where?” The forum will be held at One World Hotel in Petaling Jaya, Selangor.
“The decline in previous years was rather steep and unexpected but 2021 brought about learning curves on better managing this period of struggle. We started the year with optimism as strategies and new implementations by the government were set in place for the country,” Foo says.
He notes, however, that the property market will continue to face challenges such as geopolitical instability, supply chain disruption and inflation, which increases the cost of living.
In his presentation, Foo will also address some factors that the property market can look forward to over the next 12 months including higher foreign direct investment, job security and a more active market with the opening of several new properties such as malls and hotels. These developments will strengthen the confidence of investors in the real estate market in Malaysia.
“We do see light at the end of the tunnel with normalcy slowly approaching, but precautionary steps should always be taken as we manage the lessons learnt during the pandemic,” he adds.
Another speaker at the property forum will be Knight Frank Malaysia executive director, research & consultancy, Amy Wong.
She highlights some of the opportunities that can be found currently, including record low interest rates and the development of new MRT lines. On the former, Wong says that the current financing options are at the lowest interest rates in a decade.
“Bank Negara Malaysia maintained the OPR (overnight policy rate) at between 3% and 3.25% for almost 10 years, between 2011 and January 2020, before decreasing it gradually to a record low of 1.75% in July 2020. The recent increase to 2% is seen as a moderation of the market and should not immediately have a negative impact on the real estate sector.
“However, interest rates are subject to economic conditions, so if Bank Negara can maintain it for 10 years and drop it to a record low in seven months, the inverse is also very possible,” she adds.
Wong is a firm advocate of efficient and well-managed public transportation. “So, I’d say, follow the (MRT) lines. That’s an investment that can’t go wrong.”
In her upcoming presentation titled “Opportunities & Risks”, she will also touch on the risks property buyers should watch out for, including inflation worldwide and disposable household income. “A property is a big purchase and you have to consider world issues [when making one].”
Wong also advises prospective buyers to consider rising construction costs driven by the higher price of raw materials. The latter is a result of the volatile supply-demand situation due to the global economic environment, as well as the inevitable rise in interest rates for loans. “The developer’s track record is also very important in these uncertain times,” she adds.
Is now a good time to invest in properties? “If you believe property prices are going up, then definitely buy at the bottom of the curve now, right?” says Wong.
“Our research shows that there is an obvious shift to property purchases for owner-occupation, rather than for speculative investments and rentals. So, if you are buying for your own stay, then different factors come into play, and some factors no longer apply, such as rental income.”
Another speaker at the forum will be Malaysian Institute of Estate Agents (MIEA) president Chan Ai Cheng. Her presentation titled “Making Realty Dream a Reality” will deal with some of the main factors first-time property buyers should consider: location, accessibility, property type, size and price.
“These are very important factors that form part of the decision making process for any property buyer,” she says.
Chan says location is important because of the community and conveniences it brings, whereas accessibility should be look at as it is related to the ease of commuting, be it by personal vehicle or public transportation.
“The size and type of property is important depending on the lifestyle choices of the individual or family, whereas price is always a key factor and a constant mismatch.”
Chan advises first-time property buyers to study the price trends of the area they are interested in or of the type of property over the years as well as demographic trends. Research data is important, she notes.
“I am a strong believer that one should purchase/invest in property based on one’s own needs and abilities. Each individual’s circumstances and needs are different. As such, the decision cannot be based on the majority, general or overall type of assessment. A good time is when both one’s needs and abilities fall in line,” Chan advises.
Nippon Paint is the main partner for The Edge Malaysia RealTalk 2022. The event is also supported by Matrix Concepts Holdings Bhd, Gamuda Land and Panasonic Malaysia.