The slowing market was weakened further when Bank Negara raised the base lending rate to 3.25 percent.
Zerin Properties CEO and founder Previndran Singhe noted that while the secondary market also witnessed a slowdown, the same was marginal. In fact, the market continued to be stable.
Metro Homes Sdn Bhd director See Kok Loon said the 0.25 percent increase in BLR is too small to affect the secondary market.
“There has been no movement in the BLR for about three years. I believe the impact is minimal. Moreover, the secondary market has always attracted owner-occupiers and long-term investors,” added See.
Malaysian Institute of Estate Agents president Siva Shanker revealed that transaction volume in the secondary market stood at 427,520 in 2012, with total value at RM142.8 billion.
While the volume fell to 381,180 in 2014, value inched up by seven percent to RM152.4 billion.
“From this, we see that even though demand is slowing down, the average asking price increases about 10 percent per annum.”
Siva noted that secondary market homes are popular in Kajang, Puchong and Cheras. While these areas are known for heavy traffic, people still find them attractive as prices of two-storey homes these areas are more affordable than those in the Klang Valley.
And as more people move to the city, homebuyers are now willing to travel long distances.
“Look at Semenyih. It wasn’t a well-known place a few years ago, but now with S P Setia, EcoWorld and several other big developers entering the market there, people are crowding their showrooms,” said Siva.
However, Previndran believes that homebuyers are keener on Damansara and Bangsar for their ‘primary home address’, albeit homes at these places tend to be pricier.
“The asking price for condominiums in Kuala Lumpur, such as Suria Stonor, is as high as RM1,000 psf now compared with RM750 psf three years ago.”
See revealed that condo prices in Petaling Jaya increased to RM600-RM700 psf from RM450-RM500 psf three years ago, while Previndran said condo prices at Bangsar’s One Menerung can go as high as RM1,600 psf.
Prices of linked houses in Medan Damansara also increased to RM1.6 million-RM1.8 million from RM1.2 million over the past three years. Those in Taman Desa are being transacted at RM1.4 million, up from RM1 million three years ago.
GST’s impact on secondary market
Property consultants said while transactions at the secondary market remained low during the last three years, they are still optimistic about the market’s outlook. This is because prices are stable and healthy and are not affected much by the recent implementation of the goods and services tax (GST).
“Potential purchasers may turn to the secondary market for bargains. With the same outlay, you can choose better locations and see the finished product. Some may even enjoy immediate yield from rent,” said Previndran.
Siva believes that the secondary market will be more popular with genuine buyers than speculators as it does not provide the latter adequate time to speculate on prices.
Although homes on the secondary market will not be affected directly by GST, the services provided by banks and lawyers will be. Nonetheless, Previndran does not expect the impact to be big considering that the cost of buying properties on the secondary market is relatively low.
The common procedure to buy secondary property
1. Agree on the purchase price with the owner (the Vendor).
2. Endorse on an “Offer to purchase from buyer” by paying an “Earnest Deposit”, normally is 2 – 3% of the purchase price to a real estate agency firm. The “Offer to purchase form” will be provided by Real Estate Agent if going thru them. The Earnest Deposit is commonly held by the Real Estate Agent or a solicitor as stakeholder. If loan is needed, is better to secure loan before paying the deposit.
3. Purchaser to engage a solicitor to draft and execute a Sale and Purchase Agreement (SPA) within 14 days. Vendor will also have right to engage his own solicitor to represent on behalf.
4. Upon signing the SPA, purchaser to pay the down payment of 10% (less the earnest deposit amount) to the Vendor or to the solicitor as stakeholder (normally this 10% will be the liquidated damages sum). Purchaser may also need to pay the solicitor legal fee and stamp duty unless the solicitor allow to pay at a later stage.
5a. The balance of the 90% shall be paid by the Purchaser within 3 months (or 90 days) from the SPA date with an extended period of 30 days (or 1 month) with 8 – 10% interest chargeable on daily basis.
5b. For the land has not been issued individual title or strata title for stratified property, the Vendor or his solicitor is required to get the Letter of Confirmation from the Developer on the ownership of the said property, this may take about 2-3 weeks time from the date of signing SPA.
5c. If property is a leasehold property and the title has been issued by the relevant land office, then it is the Vendor and his solicitor’s duty to secure the necessary consent to sell from the Land office, it will normally take 6 months from the date of signing the said SPA, upon the Vendor receive the “Consent to sell from the Land Office” then only the sale becomes unconditional, the sub-clause 5a will be operative and the completion date for the sale will be commencing from the date of receiving the Consent Letter by the Purchaser’s solicitor.
6. If loan involved, the purchaser shall also execute a Loan Agreement (LA) once the SPA signed and stamped. The LA may be done by another approved solicitor by the banker and purchaser to bear the legal fee and stamp duty for the charge of the property to the said bank to obtain the loan facility.
For foreign purchasers, please visit http://www.mm2h.eu for more information.
Farah Wahida, Editor of PropertyGuru, wrote this story. To contact her about this or other stories email farahwahida@propertyguru.com.my
(Source From propertyuguru.com.my)
Link From:
http://www.propertyguru.com.my/property-news/2015/4/92313/malaysias-secondary-market-to-remain-stable?utm_source=pgmy-newsletter&utm_medium=edm&utm_campaign=agentsnewsletter-apr2015&utm_content=mainlink
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