Developers to focus more on affordable housing

Housing affordability, which has been a nagging issue among the average Malaysians throughout 2017, is expected to remain the running theme next year.

Knight Frank Malaysia research and consultancy ED Judy Wong said many developers are already refocusing their resources on the affordable housing segment, to mitigate their falling revenue due to weaker sale.

The government had also increased allocation, as announced at the recent Budget 2018, to address the rising cost of living and affordable housing issues among the low- to middle-income segments of the population.

“In 2018, the recent freeze on four components of the property market, that include condominiums and serviced apartments priced at RM1 million and above, is expected to provide a breather to the challenging luxury residential sector.

“Developers are expected to take stock of the situation by reviewing and re-planning their proposed products, and may further defer property launches,” Wong said in a statement yesterday.

The property consultant also expects to see more bite-size units, which translate to lower quantum pricing — below RM1 million — coming into the market, although there may be a risk of oversupply in this category of units moving forward.

Knight Frank also continues to see positive demand for office space in established and upcoming decentralised locations along the rail transportation routes.

The development and infrastructure progression at the upcoming international financial district of Tun Razak Exchange is also expected to revive demand for office space in Kuala Lumpur.

Knight Frank Asia-Pacific head of research Nicholas Holt said the outlook for Asia-Pacific residential market in 2018 is positive but muted, with interest-rate rises and a low probability of the lifting of restrictions likely to keep a lid on price growth in many markets.

Looking forward to 2018, Holt said many eyes will be on Chinese policymakers, on whether the restrictions on outbound investment are eased.

Another interesting milestone will be the introduction of the first Real Estate Investment Trust in India and the potential this has in bringing more transparency and liquidity to the sector in 2018 and beyond.

(Source: The Malaysian Reserve)