STAGNANT MARKET FOR PROPERTY ABOVE RM 1MIL.

Property market has been very quiet since last year, especially for those property price above RM1mil.

What would be the reasons behind?

According to banker:

Banks are very cautious when come to loan approval, the approval rate for loan has dropped to 60% as compare to same period of last year.

Income tax declaration has became one of the MUST for getting a loan. This is not surprise, as we all known, Government has given much pressure to LHDN to generate more income for national spending, and also  to address a large fiscal deficit. For those buyers who are not really declare enough income tax, would face problem when getting their home loan financing.

According to developer:

Eventhough developers haven’t adjust their initial launching price significantly, they have started to provide extra features for the houses they are selling, including branded build in fix and fixture,  more value added things have been introduced to attract buyers.

By the way, since the government has prohibited developers from implementing Developer Interest Bearing Scheme (DIBS) during construction period, this has stopped some of the investor from speculation.

According to buyer:

Some of the cash rich buyers have started to hunting for lower market price property. They’re targeting for those sellers whose are lower  holding power, as they can’t hold for so long, they might just sell the property at lower prices.

But for most of the usual buyers, as rumours said that the property market is going to soften down in next 2 years, they are willing to wait and see.

According to seller:

Eventhough market has soften down, but some of the sellers still hold their target prices at a very high level to cover the extra taxes incurred. But the question is, are the buyers willing to pay extra?

Here are the different between RPGT of 2013 and 2014.

According to property agent:

There is definitely a gap between buyer’s and seller’s expectation, which need to be matched. But from my experience, I’ve started to see some cash rich buyers who are willing to do mark down on SPA price, to enjoy the discount on price, by saving sellers cost on paying RPGT.

What would be the consequences of these series of so call “under table” action? This would definitely reduce the market value of the same area properties!! As the property value is valued according to the previous 3 months history transaction prices of the same area.