Valuation Department Property Seminar

I attended this seminar held by the Valuation Department and some interesting data was presented as well as points debated.

In a nutshell, there is still a large amount of new properties being planned, approved and constructed.

In fact, the housing stock will increase significantly.

Developers are realising that the kind of pricing that they have been charging is unsustainable and banks are increasing reluctant to fund such prices.

What was not discussed with income levels, however - because that is the key to housing affordability.

However, I guess it depends on one's philosophy on the economy. On one hand, the government should 'help' (which it does but there are obvious constraints) and on the other, in a free market / capitalist economy as ours, we really have to rely on ourselves i.e. to work and save the money for the house deposit and have the proper paperwork to support your loan application OR make enough money to buy it in cash!

Anyway, the upshot is - given the increasing supply of housing units coming into the market, the prices are likely to plateau and while there will still be growth in value, we most likely won't be seeing such dramatic growth in asset prices anymore.

Put simply: housing supply is going up, liquidity is low both from financing and from quantitative easing ebbing away - hence, prices will grow much more slowly. They won't tank, the signs are not there but they won't grow aggressively.

In fact, high end locations like Damansara Heights and Bangsar are seeing the asking prices levelling and falling on a per square foot basis.

So what's next? Time will tell...

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