At a talk entitled, “The key driver for property demand will always be affordability” during the Starproperty.my Fair 2018 in KLCC, the audience was asked about Budget 2019.
“How many of you here thinks Budget 2019 is positive for you?” No one raised their hands.
Perhaps they have yet to feel the effects of Budget 2019 since it will only start next year. Moving on, the audience was asked if they believed property prices were already too high. Most nodded their heads.
Most were owners of properties and not first-time home owners. Perhaps this explains the no-show of hands earlier, as Budget 2019 is quite focused on first-time home buyers from all the measures introduced by Finance Minister Lim Guan Eng.
In an article in NST, Henry Butcher Malaysia was quoted as describing Budget 2019 as “mildly positive”. The reason? The positive GDP growth forecasts of 4.8% and 4.9% next year and in 2020. This should provide support for a stable property market.
With regard to the continuation of the MRT Sungai Buloh-Serdang-Putrajaya and Light Rail Transit Line 3 after costs were cut, the company said the following:
“This is certainly sweet news to property developers who have purchased land along these rail lines to take advantage of the enhanced accessibility, as well as investors or house buyers who have invested in properties near the proposed stations along these lines in the hope of enjoying strong capital appreciation when these rail lines become operational.”
By the way, the MRT SSP and the LRT 3 were already part of the property market and continuation should not be considered as positive from the Budget 2019 perspective.
As for Henry Butcher Malaysia’s “mildly positive” assessment of Budget 2019, perhaps what they meant is that they are neutral on what Budget 2019 will bring but thinks that the economic growth will support the property market.
Meanwhile, a developer in the same property show said many potential buyers wanted to wait till 2019 to buy due to current uncertainties.
When asked if most were first-time home buyers, he answered, yes.
It is possible that the market needs a bit more push, and it’s not enough to only rely on first-time home buyers only.
This article first appeared in kopiandproperty.com
Charles Tan blogs at property investment site kopiandproperty. He dislikes property speculators and disagrees that renting is better than buying. He thinks it’s either property or poverty. He is presently the CEO of an auction house auctioning assets beyond just properties.