Property sales likely to drop amid stringent loan conditions

GEORGE TOWN: Property transactions are likely to decline this year amid cautious sentiment and stringent housing loan regulations by financial institutions.

Real Estate and Housing Developers’ Association (Rehda) Penang chairman Datuk Jerry Chan said the property market was likely to register a decline in both sales and value.

The market is likely to see a 20% decline in value, he said after briefing reporters on the three-day Malaysia Property Exhibition 2014 to be held from Feb 2.

Organised by Rehda Penang and Henry Butcher Penang, properties ranging from RM370,000 will be on showcase for prospective buyers.

Chan said the central bank’s move to tighten consumer loans was likely to impact the property market, and that between 80% and 90% of prospective buyers depended on loans to purchase houses.

Besides, he said, buyers were also becoming more cautious this year, given the backdrop of the rising cost of living.

However, Chan said Malaysia’s property market was still bullish, as the segment was driven by low interest rates and economic growth.

He explained that 2014 would be a good year for buyers to purchase properties despite the uncertainties. “Developers would sell new products at new costs and land values amid rising construction and labour costs,” he added. – Bernama