The recent floods in Selangor, which flooded various sections of the state for several days and damaged certain building and residential facilities, have raised concerns about the property market in the affected areas.
Mohd Saharudin Tunggal, a licenced real estate agent of Legacy Real Property Sdn Bhd, stated that while the property market price in the neighbourhood was expected to be damaged, the fact is that it hasn’t happened yet because the accident happened not too long ago.
However, he believes that, naturally, demand for flood-damaged residences will fall, as more tenants will want to leave, purchasers will cancel purchase plans, and owners will want to sell the affected homes.
Mohd Saharudin said his company had received calls from various residents who wanted to sell their homes after the floods in Puchong and Klang.
He claimed that the impact of Covid-19 and the recent flood tragedy had had a direct influence on the property market in Selangor as a whole, and that buyers would be more cautious in picking disaster-proof regions. “However, a house is a necessity, and people will rent if they can’t afford to buy; the transaction will still take place, but the consequence will be evident in terms of the price and value of the property, which will fall,” he said.
In the meantime, Qarliff Zamzuri of Messrs Qarliff & Associates said his firm had received dozens of calls from property buyers and sellers in Taman Sri Muda, Shah Alam, and Puchong seeking guidance on the process of buying and selling flood-affected homes.
According to him, the buyer can cancel the sale and purchase agreement for the residence in this circumstance, but the deposit will not be repaid.
Alternatively, he warned that if the seller wanted to keep the deal going, he would have to rebuild and rehabilitate the home as seen by the buyer prior to the flood. He explained that in the case of properties carried away by floodwaters, the transaction could not be completed and that the seller would have to return the money to the buyer.
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SHAH ALAM (Jan 5): The recent floods in Selangor which submerged several areas in the state for several days and affected some building and residential infrastructure have conveyed the expectations that the property market in the affected areas will be affected.
Legacy Real Property Sdn Bhd’s registered real estate agent Mohd Saharudin Tunggal said although the property market price for the area was expected to be affected, the reality is it has not happened yet as the disaster had only hit about two weeks ago.
“The Valuation and Property Services Department (JPPH) will usually issue a property market report every six months,” he told Bernama.
However, he said that logically, the demand for flood-affected properties would definitely decline with more tenants wanting to move out, buyers cancelling purchase plans while owners would try to sell the affected homes.
“Currently, in areas such as Kota Damansara and Petaling Jaya which are not affected by floods, demand is still encouraging but flooded areas, including those near the coast such as Klang, have not received any inquiries from buyers in the past two weeks,” he said.
Mohd Saharudin said his company had also received requests from several homeowners affected by the floods in Puchong and Klang who wanted to sell their homes.
“Usually for such homes we will not lower the value of their properties, we will follow the previous value, we will only see the future in terms of demand and if there is no demand at all, logically the price will be lowered,” he said
He said the impact of Covid-19 and the latest flood disaster had directly affected the property market in Selangor as a whole and buyers would be more careful in choosing areas that were safe from disasters. “However, a house is a necessity and people will rent if they cannot buy, then the transaction will still happen but the effect will be clearly seen in terms of the price and value of the property which will decrease,” he said.
Meanwhile, Qarliff Zamzuri said so far his company Messrs Qarliff & Associates had received dozens of calls from property buyers and sellers from Taman Sri Muda, Shah Alam and Puchong who wanted to seek advice on the process of buying and selling houses affected by the floods.
According to him, in such a situation, the buyer can cancel the sale and purchase agreement of the residence but the deposit payment will not be refunded.
“This is because there is nothing in the agreement that states that the area is flood-free and buyers should do ‘due diligence’ or appropriate steps first by reviewing the condition of the area before signing the sale and purchase agreement,” he said.
Meanwhile, on behalf of the seller, he said if the seller wanted to continue the sale, he would have to repair and rehabilitate the residence as seen by the buyer before the flood.
“The job of homeowners and sellers is to ensure that the house is delivered in a clean, good and undamaged condition as seen by the buyer when looking at the house, that is the buyer’s right,” he said.
However, he said, if the seller could not afford to do so, they would have to return the deposit and pay a penalty with the same deposit value to the buyer (10+10).
“Besides that, this matter can also be resolved at the discretion between buyers and sellers, such as lowering the price of the property without doing repairs and restoration,” he said.
For the situation of houses that were swept away by floods, he said the transaction could not be continued and the seller had to return the deposit to the buyer.
Source: Edge Prop