As an alternative, first-time home-buyers should look into the secondary market with properties there more affordable, says the Finance Ministry.
Director-General of Valuation and Property Services Dr Rahah Ismail said the primary market pricing is usually inflated, due to freebies and rebates, and there is a higher chance for loan eligibility in the secondary market.
“When the price is inflated and first-time buyers apply for house loans, they are usually ineligible, as salaries would not have reached the intended bracket,” she told reporters at the 10th Malaysian Property Summit 2017 here Thursday.
As of the third quarter of 2016 (Jan-Oct 2016) approved home loans were at 41.8% compared to the corresponding period at 50.3 per cent.
Rahah said on the positive side, home-buyers have options with the housing stock in Malaysia close to five million, with an incoming 800,000 units and 580,000.
Currently, the market share for secondary properties stood at 82% with the remaining 18% in the primary sector.
“Even though the market remains soft, there is still strong demand for affordable homes that are below RM300,000,” she said.
The primary market, however, is equally important for the economy as it stimulates growth, creates jobs and is linked to many factors in the Malaysian economy.
“The primary market also serves as a benchmark for the secondary market,” Rahah said.
On prospects, she said the property market is expected to remain soft in 2017, especially the primary segment, which would continue to slow down as developers review products and pricing.
Hence, house buyers can look into the secondary market for affordable homes, she added.
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