Headquartered in Kuala Lumpur, Rahim & Co International is in its 41st year of delivering real estate services to local clients and investors from around the world. Despite market challenges, including housing affordability, Director of Research Sulaiman Saheh is capitalizing on Malaysia’s many market opportunities. Find out more about the firm’s success in this interview with Saheh.
Real Estate magazine: Please tell us about your firm.
Sulaiman Saheh: Established in 1976, Rahim & Co has 18 offices throughout Malaysia, with its head office in the heart of Kuala Lumpur. Celebrating 41 years of serving both local and international clients, our close to 400-strong workforce, including 27 registered sales professionals, provides expert real estate services throughout the whole of Peninsular Malaysia, East Malaysia/Borneo, international regions such as ASEAN (Association of Southeast Asian Nations, comprised of 10 countries in the region), the United Kingdom, China and Australia.
RE: Please describe your current housing market.
SS: The RM (Malaysian ringgit) 60-70 billion residential market (in terms of annual market transactions), consisting of approximately 200,000-250,000 units sold annually, represents two-thirds of the property market in Malaysia. The Malaysian residential market at present is going through a consolidation period after a bull run subsequent to the 2007/08 global financial crisis.
Transaction activities have since been showing a declining trend at around 7 percent per annum from the peak in 2012. Up to 2014, despite a slowing down in property sales, the total value of transactions was still climbing; however, in 2015, the value of residential transactions dropped for the first time since 2009, and the same was expected in 2016. Nevertheless, residential prices are still holding with even a marginal increase in average house prices across major urban centers.
The average house price in Malaysia is around the RM350,000 mark. Looking specifically into urban centers such as Kuala Lumpur and Petaling Jaya, an average terraced house is priced anywhere from RM620,000 to RM1,000,000. A prime condominium unit in Kuala Lumpur ranges between RM1.5 to 2.0 million.
The marketing period for a house is dependent on many factors, like market cycle, consumer sentiment and other macroeconomic factors, on top of the property’s location, design, quality and type. Generally, a good product in a healthy market would be sold within three to six months, but during tougher times, the same property can be on the market for more than 12 months.
RE: What are some of the challenges in your current market?
SS: One issue that is hotly debated today is housing affordability. During the boom period, especially between 2010 and 2013, housing prices soared at 11-13 percent per annum, and up to 18 percent in certain areas. Although the rate of increase has been more muted in recent years, homebuyers are disgruntled about how unaffordable houses are. This, coupled with the cooling measures imposed by the central bank, Bank Negara Malaysia, such as tightening of loan eligibility criteria, the relaxation of the Real Property Gains Tax and abolishment of the Developer’s Interest Bearing Scheme, prevented many homebuyers from getting approved for loans. Government programs such as Projek Perumahan 1Malaysia or PR1MA are being rolled out to create more affordable units in the market. Private developers have also entered this segment of the market.
RE: What are the various types of properties available in your market, and which is the most popular?
SS: The residential sector accounts for 65.2 percent of property transactions in the country, whereas commercial, industrial, institutional and agricultural properties, as well as development land, make up the rest. There are various types of residential products available in the market, including low-cost houses and apartments, mid-range terraced, townhouses, semi-detached houses, detached houses and condominiums, as well as high-end products like luxury bungalows, villas and super-condominiums. Generally, two-story terraced houses are the most popular in the country, but in urban centers, condominiums are also very popular.
RE: How prevalent is new construction/development in your market, and how is it affecting your business?
SS: Some developers have slowed down or even deferred their projects to the latter half of the year or the following year. Nevertheless, there are still private developments and construction projects going on, especially in hot areas where demand is strong. Public infrastructure projects such as the MRT lines, the Pan Borneo Highway and Penang Sentral are not just catalytic to the property and economic sectors, but are also crucial to bettering the quality of life for locals.
RE: Please tell us about the buyers you work with.
SS: We work with local as well as foreign buyers. The foreign buyers that are working with us are mainly from Singapore, Indonesia, China (including Hong Kong) and Europe. For these foreign buyers, Malaysia is an attractive location.
RE: What are some of the most important trends in your market?
SS: The key trend is the Transit Oriented Development (TOD), where there is convenient access to the facilities and living areas through public transport. Even though it has been natural for developments to grow along transportation lines, a proper guideline has been created to structure this type of development. Another major movement is to provide affordable housing for the mass market.
RE: What are your biggest challenges/opportunities for growth?
SS: The biggest challenge is the uncertainty under a tough environment from both the economic and property fronts. It is imperative that we ensure our services will meet the clients’ expectations. The other challenge is to be able to cope with technology advancement. Information is easily available and readily accessible, and, thus, there is a constant need to be able to come up with better and newer products and services.
RE: What are some of your most successful strategies for promoting/marketing your business?
SS: Our main strategy is leveraging our unique ability to provide the highest standard of service, which combines the best of international standards with local know-how. We provide highly focused expertise and knowledge by having dedicated teams for every sector in order to provide comprehensive consultative services.
Partnerships with local and international publications also create unique values that identify us as a leading property consultancy.
RE: How does being part of Leading Real Estate Companies of the World® help advance your business?
SS: This partnership will make us even more prominent and will strengthen Rahim & Co’s position in the global market even more, placing Rahim & Co on the world map as a top international real estate player.
For more information, please visit www.leadingre.com.
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