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With zero indication of when the Covid-19 pandemic will finally come to an end, it continues to leave shockwaves in nearly every aspect of our lives.
One particular example is in the property market, where there are fears that a property bubble will occur.
Logically speaking, however, this should not be the case as shelter is a basic human necessity, so there will always be a demand for it.
According to Vivahomes real estate negotiator, Haniza Hadi, although the property market is currently a buyer’s market with more supply than demand, it is still possible to find buyers for a subsale property as there is now a larger number of buyers interested in the secondary market.
“Buyers tend to prefer subsale properties as the houses are already completed. There are more choices and it only takes a maximum of nine months before they can move in,” she explained.
“For new projects, they need to wait at least two years, assuming that the construction is not delayed.”
She also added that in terms of financing, loan applications for subsale properties have a higher chance of being approved by banks.
This is because banks already have a valuation of the property and are confident that there are no mark-ups in pricing.
“If the price of a subsale house is on par with projects under construction, why not go for the subsale?” she suggested.
Haniza told Property Advisor that developers that offer large cashback on new projects have usually included the Memorandum of Transfer (MOT) and other costs in the selling price of the property, making the price higher than the actual value of the property.
She also added that landed properties are considerably easy to sell compared to highrise properties. In fact, it’s possible to find a buyer within a mere three months after advertisement.
“Water supply disruption has become one of the factors that buyers take into consideration when choosing a new home. Can you imagine going up and down numerous times to collect water?” she joked.
Selling your home during a pandemic
For secondary property sales, a seller cannot rely purely on their agent’s efforts. Haniza emphasised that full cooperation from the seller is key to a smooth transaction.
“For example, if a homeowner has renovated the house, they need to produce their certificate of approval for the renovation.
“This will make it easier to conduct a valuation and obtain the updated market value for the house as we can’t just put a random price on it,” she explained.
Other than a certificate of approval for renovations, there is also a checklist of documents that homeowners should provide their agents with before a house can go up for sale, which includes:
- Copy of Sales and Purchase Agreement
- Copy of land title
- Copy of house plan
- Copy of Certificate of Fitness
- Copy of Master tile / Strata title
- Copy of assessment tax
- Record of maintenance fees payment (for condominiums)
- Approval of renovations
- Valuation report (if available)
- Utility bills
Haniza said the documents are essential for agents as it makes the process of advertising and showing the house to potential buyers much smoother.
Homeowners who want to sell their homes are also encouraged to allow their agents to take photos and videos of the property.
“Before advertising the property, agents will carry out their own research and checks. This includes liaising with lawyers, land office and valuers,” said Haniza.
“Having the complete documents speeds up the process considerably, especially for valuation.”
When agents have ample knowledge of the property they are selling, they will automatically be more confident in their presentation, and in turn, the potential buyers are also more convinced.
Later on, once the potential buyer has agreed to purchase the property, the transfer of property and loan will also be sped up.
Haniza added that with complete disclosure between the seller and their agent, all the seller needs to do is wait for the transaction to be completed after the initial handover of documents.
“The agent won’t need to keep referring to them for small details so their work gets done much faster. It’s a win-win for all parties,” she said.
Current market trends
According to Haniza, although landed properties are currently in demand in both primary and secondary markets, the demand for highrise properties are higher in the rental market.
“Youths who have just stepped foot into the working world still can’t afford to buy a home, hence they would go for the cheaper alternative – renting a highrise,” she said.
Sometimes, agents would advise homeowners to put their property up for rent instead of for sale, especially if it’s in a high-density area.
As the prices for high-density neighbourhoods are usually higher, it may take a while to find a buyer.
“So if the homeowner needs money urgently, it’s better to rent it out first,” advised Haniza.
There is also a notable increase of buyers who are investing in property to both buy and rent, as can be seen from the growing popularity of dual key condominiums.
With a dual key home, the homeowner can live in one part of the house and rent out another, which is a smart way to reduce the cost of monthly home loan instalments.
When asked about the property market since the pandemic began, Haniza told Property Advisor that not much has changed.
“Other than banks becoming a bit tighter with their loans, the demand is still there. In fact, buyers may be able to find good deals as some sellers are desperate to sell off their properties.
“The most in-demand properties at the moment are landed properties under RM500,000 and rentals under RM1,500 a month.”
Nonetheless, Haniza said that agents will always do their best to secure a deal that benefits all parties.
“The most important thing is transparency and communication among the seller, buyer and agent.
“On the buyer’s side, they should at least be able to produce their CCRIS report to show their commitment towards purchasing the property.”
This article was written by Adlene Hanna of PropertyAdvisor.my, Malaysia’s most comprehensive source of property data, property analytics and insights.