Friday 29 Mar 2024
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This article first appeared in The Edge Financial Daily, on April 13, 2016.

 

KUALA LUMPUR: Mah Sing Group Bhd, the country’s second-largest property developer by sales value, said the worst is over for Malaysia’s property market as various market indicators point to a bottoming out of the market.

Its executive director Datuk Steven Ng said the indicators include the slowing down of a contraction in residential property transactions and moderating house prices.

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“If you look at the house price index, it has moderated to a more sustainable level from 11.8% to [a] single-digit growth of 5.8% now since the cooling measures were introduced in 2012,” he told a press conference on the sidelines of the 12th Invest Malaysia 2016 here yesterday.

“We believe the current level is healthy because we find that people who are buying now are either buying to stay or for investment,” he added.

Ng is of the view that the fall in residential property transactions has hit the bottom, given that the pace of decline slowed in the fourth quarter of 2015 (4Q15), compared with 3Q15 and 2Q15.

He added that demand for housing remains healthy, especially in the affordable segment, noting that speculative activity in the property market is at a lower rate now.

“For the affordable residential segment, demand is still very healthy, outstripping 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,” said Ng.

“And with the ringgit at this level, we will probably see some investors starting to look into Malaysia,” he added. The ringgit closed 0.23% higher at 3.88 to the US dollar yesterday.

Despite the slightly more positive view on the local property market, Mah Sing maintained its sales target of RM2.3 billion for 2016, similar to its target for 2015, after a revision from its original target of RM3 billion 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 goods and services tax implementation, but we did not expect the extent of the impact of the slump in oil prices and the ringgit on consumer sentiment.

“So, we revised the target down to RM2.3 billion for 2016. We are maintaining this target until we see more signs of improvement in the market,” said Ng.

Mah Sing is confident of meeting its sales target for 2016, despite scaling back its launches in 2015 and 2016 as it still has enough ongoing projects to support its performance for the year, he added.

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