Weaker consumer sentiment dents property sector

by FARA AISYAH/ pic by TMR FILE

BUOYANT consumer sentiment on the property market continues to weaken housing demand in the country. PropertyGuru Malaysia said the Property Sentiment Index dipped two points to 42 points early this year from 44 in the first half of 2019 (1H19).

From the 1,108 respondents to the polls, 41% of Malaysians were optimistic about the overall property outlook in 1H19, but only 35% felt the same way in 1H20.

“This decline is likely due to the ending of the Home Ownership Campaign, as well as the lack of strong property provisions in Budget 2020,” PropertyGuru Malaysia country manager Sheldon Fernandez said in a statement yesterday.

“Macroeconomic headwinds, including trade tensions at the time and slowing global growth, may have played a part as well. As we move further into 2020, socio-political uncertainty may take its toll on sentiment as well,” he added.

However, the outlook on interest rates has improved with only 15% of Malaysians seeing interest rates as “too high” in 1H20, with 29% of respondents calling them “reasonable” or “fair”.

Fernandez foresees interest on properties to rebound on the back of Bank Negara Malaysia’s recent cut of its Overnight Policy Rate.

Data from the National Property Information Centre showed that residential property overhang in the third quarter of 2019 (3Q19) stood at 31,092 units compared to 30,115 units last year, although the value dropped from RM19.54 billion in 3Q18 to RM18.77 billion.

Johor contributed the highest number of residential overhang with 5,470 units, followed by Perak (5,126) and Selangor (4,872).

Condominium, apartment and flat made up 46.1% of the total overhang in residential properties, followed by two- and three-storey terrace (29.9%) and semi-detached and detached houses (12.8%).

As for the commercial property segment, the overhang volume in 3Q19 was 24,820 units valued at RM19.81 billion, against 15,600 units worth RM11.64 billion previously.

The Malaysia Consumer Sentiment Study for 1H20 by PropertyGuru also showed that the consumers are embracing sustainability features when planning for future home purchases.

“The majority (63%) of Malaysians are thinking ahead and prioritising environmentally sustainable features, with solar panels (70%), smart cooling systems (59%) and pollution-absorbing interiors (40%) highest in demand.

“These desires underscore the rising costs of living in the country, along with growing quality of life concerns, particularly in urban areas. They also align with the government’s current green initiatives, including a 20% renewable energy mix in its 2025 generation targets,” Fernandez said.

While energy-saving solutions were the sustainability features highest in demand among home seekers, water and waste management were also in considerations, with rainwater harvesting (37%), water recycling (31%) and food waste composter systems (22%) cited as desirable.

High-income respondents in Malaysia were more likely to be interested in solar panels and smart cooling systems, with 76% and 63% of such home seekers citing interest in such features respectively.

Some 43% of less affluent home seekers prioritised water recycling solutions — higher than other demographics.

While generally low in demand, indoor farming and food waste composter systems were more popular among female home seekers, 28% of whom reported interest in such features, compared to only 18% of males.