PETALING JAYA (Oct 13, 2011): The slowdown in property sales in the country is not a sign of a property bubble, said Housing and Local Government Minister Datuk Seri Wira Chor Chee Heung.
"I do not think so because we (Malaysia) still have not reached that stage. If this is the sign (of property bubble) why are developers jumping in to continue to build?" he said.
Chor was speaking to reporters at the 19th Fiabci Asia-Pacific Real Estate Congress 2011, which was opened by Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah here today.
Chor is one of the speakers at the three-day congress.
He explained that the current slowdown in the property market is due to the policy measures taken by the government to curb speculation.
"Property prices are still stable and no asset bubbles are seen," he added.
Chor said the government has issued more licences for developers to sell and advertise their products this year.
On the hike in Real Property Gains Tax (RPGT) to 10% for properties held and disposed of within two years, he said it is a realistic percentage because the government does not want to slow down the growth in the property and construction industry.
"At the same time, there would not be much room for speculators, who try to speculate and make money from buying and flipping properties in a very short time," he said.
Meanwhile, the Malaysian Institute of Economic Research (MIER) residential property survey said the slowdown in housing observed in the second quarter of 2011 has continued into the third quarter.
It said a number of concerns such as government policies, the overall volatility of global capital markets and creeping inflation may have ruffled sentiments here.
"The level of confidence remains way above the 100-point threshold level, suggesting that sentiments in this sector, though lower, generally remain positive," it said.
The survey said double-storey houses continued to be as popular in Q3 as they were in Q2.
It said 34% of respondents said their double-storey properties were the most saleable during this period while 29% of single-storey house owners felt the same way.
Bungalows have also been whetting housebuyers' appetite lately as they were tagged as most saleable by 3% of the builders surveyed, it said, adding that lower demand for new houses was also causing a sag in residential construction.
The survey said residential property builders are generally modest about their current state of business activities, although they appear somewhat cautious about their prospects in the coming months, with more lowering their targets for the fourth quarter.
Although the majority of the respondents plan to increase their construction activity, prices and sales before year-end, the responses polled this time are smaller in proportion to those obtained a quarter ago.
The housing sector looks likely to continue progressing steadily but cautiously into the next quarter as building materials and labour costs continue to be major challenges, as are concerns over a slower economy and tighter measures such as mortgage approval criteria based on net salary, and loan-to-value cap at 70% for a second mortgage.
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