By Propedia Consultancy founder Sr Vicky How

The long-awaited moment has finally arrived, albeit the talk about the general election has been going on for over a year. There’s no doubt the property market has been quiet for a while now.

Many predicted that there would be a change of government that will cause different policies to be revised. At times like this, most buyers opt for the ‘wait and see’ approach.

As for investors, a lot of them have put aside some of their money for uncertainty in the future, and to add salt to the wound, they even cash out some of their investments to prevent losses.

The effect of the election on property value is the conditioning of the human mindset about a particular change which, to be honest, many are uncomfortable to confront with. Might I remind you that the effect is not permanent, but temporary, and most of the time it is insignificant?

This effect happens for the first three to four months before the speculated election day, and it does not only occur to Malaysia’s property market but is prevalent in the rest of the world as well.

However, this time around the speculation has gone for more than over a year, affecting the hopes of property investors.

A majority of the investors are holding tight to their funds and homeowners panic as it is difficult for them to find a genuine buyer in the market.

There was also further speculation in the market on how the country is doing poorly, the news is driving homeowners crazy, and so they are willing to let go at a slightly lower price to cut losses and accommodate to their homebuyers.

Speculation of the upcoming election was also accompanied by the volatility of share prices and temporary inflation. These symptoms often affect sentiments from the public and create uncertainty in the market in the event of a change in government. It demotivated the spirit of investing for that period.

The good news is, the uncertainty is now over, and we have a new beginning.

The aftermath of election profoundly affects the property market as well as the local bourse. As many investors put their plans on hold, there will be an intense pressure that is waiting to evoke.

Based on the number of property transactions in the past, where we had our elections in the year 1995, 1999, 2004, 2008 and 2013, you will see a drop in the property transacted compared to the previous year.

However, the year after is when we can see a drastic increase in demand. In 2013, we saw a difference when comparing to the past trend. The transactions continue to drop despite after the election.

Table 1: No. of transacted property from year 1994-2017. Source: NAPIC

So, what had happened in 2013 that contributed to such a nasty result?

Some could still recall the economic landscape during that period where the oil prices have affected the market and influenced redundancy. In turn, it influenced expatriates to leave the country and made spots like KLCC condominiums vacant for months.

On top of that, the country is also suffering from a fall in share prices and the depreciation of the ringgit. During the time, the previous government introduced the Goods and Service Tax (GST) and increased the Real Property Gains Tax (RPGT) to the highest bracket.

Many Malaysians were unable to cope with drastic changes in a short time frame and to make things worse; our country was also affected by the two lost planes in 2014.

The question now is, after five years, can property market recover to its glory?

According to the past transaction, property price on average have not fallen; in fact, it has been increasing every year. However, the rate at which it has been growing is decreasing. In other words, property price will increase no matter what.

It is just matter of time to evoke the next economic boom. In my opinion, it will not be long as it has been brewing for quite some time.

Table 1: Property Average price and percentage change from the year 2011-2017. Source: NAPIC

So is it still possible to obtain a below market value property?

Property priced below the market value exists anytime in the market. As long as an owner is desperate or has defaulted the loan, you can find said property. However, it is easier to find such deal in a bad economy rather than a good economy.

Looking at the trend right now where oil price has slowly recovered, and the share prices are up since the end of last time, we can say that our property market is improving and going towards a positive change.

I foresee that property price will be going up in the long run. It is time to look for your dream home before you miss it.

Sr Vicky How