Braced for a property glut | Biz Info

Braced for a property glut

Everyone talks about rising residential property prices and high rentals because of rising demand and speculative activities. Now they are talking about the impact of GST too.

IS a glut in residential property or a slowdown imminent? IFCA MSC Bhd chief financial officer Daniel Chow seems to think so.

Chow was an invited speaker at a significant property event last week where one of the key speakers showed that actual sales last year for all the major players in the industry, except for one, was much lower than their forecast.

“Everybody recorded negative. There was only one exception. The fundamental rule on economics is demand and supply. When there is oversupply, this is what happens.

“How much is the population growth in Malaysia? Less than 3%. And how much is your purchasing power growth? On average 6% to 7% year by year.

“But the increase in the supply of property is double digit every year. How can you expect the market to absorb all this? There is a limit,” he says in an interview.

For him, the introduction of the GST in April is not going to cause a spike in prices from April to December.