Challenging 2017 for property developers

Challenging 2017 for property developers

Property developers in Sarawak face a challenging outlook this year due to stricter lending guidelines by financial institutions and the government’s affordable housing policy.

Sarawak Housing and Real Estate Developers Association (Sheda) Kuching branch adviser Sim Kiang Chiok said house sales were affected by strict end-financing of properties.

“Borrowing based on net income has moved to even more strict lending guidelines based on proven income and no projection of future earnings is allowed.

“Borrowing for properties should be considered as savings instead of spending.

“This is because in Malaysia, with protections already in place, properties appreciate and not depreciate like machinery and other disposable goods,” he said.

Sim added banks should consider lending on staggered repayment, for example with lower repayment amounts in the first five years and subsequent repayment on an ascending scale.

“Banks can also consider a longer repayment period or even extend housing loans to two generations.

“We hope the banks will take note of the slowdown and adjust their lending guidelines so that the property industry can grow and contribute to the country’s economy and prosperity,” he added.

Sim also said the government’s policy of building affordable houses through Federal authorities such as PR1MA will increase the supply of houses priced below RM400,000, causing some overlaps with houses supplied by private developers priced between RM300,000 and RM400,000.

He said developers would need to adjust their pricing strategies and products through the design and type of the houses they build and the location.

In addition, developers would have to consider supplying to the higher-income group or taking the role of contractors to the government agencies building affordable and public housing.

On a more positive note, Sim said the state government had changed the planning guidelines to increase the density of landed property from eight to 10 units per acre and strata title density from 24 to 30 units per acre.

“This will reduce the cost of building houses on existing land owned by developers.

“However, landowners now can ask for a higher price as more units can be built based on the increased density,” he said.

Sim added popular residential areas in Kuching include Tabuan Jaya, BDC, Batu Kawa and Matang.

“Kota Samarahan is also increasing in popularity, being a university town with a growing population,” he said.

Sim noted that the most popular residential property was double-storey terraced houses, while apartments were popular among first-time home buyers for their affordability as well as pensioners due to their security and “lock and go” convenience.

Source: Thestar.com.my

 housing development, developer, property market

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