“If you look at the growth of property loans, it is trending downwards. So, the softness is reflected in the banking statistics,” said investment analyst and non-executive managing director of Datametrics Research and Information Centre Pankaj Kumar.
He said that to a great degree, how the residential property market will pan out in 2022 is reliant on interest rates.
Pankaj was part of a panel discussion at the association of valuers, property managers, estate agents and property consultants in the private sector Malaysia (PEPS), 14th Malaysian Property Summit 2021: Eye on 2022.
“If loan growth shoots up, you will know that the market has turned the corner.
“It is all about interest rates, but currently it is a buyers’ and renters’ market,” he said.
He said there are various structural issues that have to be addressed if the market is to move forward.
Some of these issues relate “to our minimum wage, how well we pay Malaysians which in turn relates to affordability” because the country has many unsold completed units which are priced at RM200,000 and below.
“So, there is a mismatch in terms of location, and affordability on different fronts,” he said.
He added that the local authorities who give approvals to developers need to play a bigger role and ensure that all developers’ applications that come to them are well thought out and have demand.
Another panellist, Loong Kok Wen, the head of regional property research for RHB Investment Bank, said she was trying hard to look for positive news that would spur the broad property market.
The manufacturing sector like furniture-making and electronic gadgets manufacturing is expanding, particularly in Peninsular Malaysia, and this will spur growth and, in time, the job market, she said.
“Household income has been affected but the silver lining is that the young people are smart and opportunistic. In the banking system, we see a lot of savings because Malaysians cannot travel.
“The question going forward is, will the reopening of the national economy be on track? Or will it be slow, (with disruptions)?
“Economic growth is returning but we will have to wait for more data to be released,” Loong said.
She added that the fallout from China’s Evergrande crisis may have some contagion effect but China is a large country with a huge population and demand will return in the medium to long-term.
Evergrande, China’s giant developer conglomerate, is on the verge of collapse due to its huge debts.
“We need to look at the details pertaining to the glut of properties – across the board – in Malaysia,” Loong said.
The moderator for the panel discussion, Elvin Fernandez, said the two main gatekeepers of the property market are local authorities, who give approval to developers’ applications to build, and banks, who provide financing.
The local authorities and banking and lending sector should insist on independent market and feasibility studies before giving approvals and financing respectively, he said.