Kota Kinabalu: Property transactions between January and end of March this year, dropped 4.6 per cent compared to the same period last year, although the central bank suggested that domestic demand had continued to support growth in the first quarter. (Down to 88,600 units from 92,900 units in the whole country)Predictions of a surge of property buying frenzy prior to April 1 by sellers and property show profiteers fell through partly due to quality loan vetting process.
Bank Negara Malaysia is maintaining its Overnight Policy Rate at 3.25 per cent until mid-year as borrowing costs are left unchanged.
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The other major part was the inertia of wait and see by the public despite property developers persistent mouthing of rising pricing from GST impact.
Economist Dr Chua Hak Bin expects Bank Negara to cut the OPR by 25 basis points only from the second half of this year if at all as official inflation averaged 0.7 per cent in the first three months of 2015 due to lower domestic fuel prices, although GST pushes up other prices.
Bank Negara will release details of the first quarter gross domestic product (GDP) results on Thursday May 14. CIMB Investment Bank expects Bank Negara to continue to adopt a wait-and-see stance on observing whether the downside risks to global growth will increase, only then deciding whether to cut interest rates.
GDP growth may not slow down that significantly in the first quarter of this year to justify a rate cut, although elsewhere around the world saw some interest rates dropping.
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Lending calls for homes dropped 9 per cent in 2014 with GST impact adding 4 per cent to average pricing.
Homes costing up to RM500,000 appreciated in purchase volume from 74,153 units in 2013 to 102,082 units in 2014 is the leading trend for the future.
Lending calls for non-residential property dropped by 13 per cent in 2014.
Exceptions were affordable homes. Home sale figures grew 0.4 per cent from 247,251 units in 2014 from 2013's 246,225 units continuing the dominance by the residential sub-sector at 64.4 per cent of the Malaysian property market.
Commercial properties at 9.3 per cent of the industry wheeling and dealing grew 3.6 per cent to 35,528 units with pricing going up as high as 30 per cent in some cases not only from GST.
Prices are not dropping overall, but are appreciating, disappointing those who expect to gain from picking bubble burst fire sale opportunities.
In 2014, the property market gained 0.8 per cent increase in the volume of transaction up 384,060 from 2013's 381,130 units, with a 7 per cent gain in value signalling prices going up.
The whole country faces issues of insufficient supply for some property types driving up prices as inflation aggravates matters.
Prospects are for the local economy to remain on a steady growth path with domestic demand as the key driver.
The Malaysian property development sector supports 60 per cent of the total cement market in the country, while large infrastructure projects account for 40 per cent.
Any slowdown in the property sector will impact the cement and concrete suppliers, and with the advent of the GST regime, many could not afford to extend much credit to builders as GST has to be settled to the Customs.
Meanwhile, the government received a petition from a domestic producer for the imposition of anti-dumping duty on imports of steel concrete reinforcing bar in straight length form.
The petitioner alleges that imports of steel concrete reinforcing bar in straight length form originating or exported from the People's Republic of China and the Republic of Korea are being dumped into Malaysia.
Builders should be able to enjoy lower cement concrete costs as well as cheaper steel concrete reinforcing bar in order to build more affordable homes. The interests of monopolistic businesses should not stand in the way of cheaper homes from cheaper but quality building materials.
