The drop in supply increases the demand for houses in the area by 60%
by FARA AISYAH/ pic by HUSSEIN SHAHARUDDIN
LISTINGS of sub-sale homes in Iskandar Puteri, Johor, declined by 50% in the first half of 2020 (1H20), while the number of buyers interested in properties in the area remained the same.
REA Group Asia customer data solutions GM Premendran Pathmanathan said the drop in supply, therefore, pushed the demand for houses in the area by 60% during the same period.
“The overhang situation in Iskandar Puteri will decrease due to lower supply in the sub-sale market. More buyers in the market today translate to less competition too,” he said at a virtual press conference yesterday.
Although the overhang numbers were mainly contributed by the primary market, Premendran said the secondary market is the direct competition for new homes.
Data from iProperty.com.my’s 1H20 Portal Demand Analytics showed that demand in Iskandar Puteri jumped 62.45% year-on-year (YoY).
The analysis revealed that the newly developed township has a balance of visits and listings, therefore any volume shift on either the supply or the demand end will show a significant growth or decline.
Meanwhile, the overall demand of Malaysian sub-sale homes in 1H20 decreased by 2.5% YoY due to the Covid-19 pandemic and subsequent Movement Control Order (MCO) which brought real estate activities to a halt for more than eight weeks.
Kuala Lumpur’s sub-sale properties demand recorded a marginal dip of 0.3% YoY in 1H20, while median price dropped by 2.7% to RM500,000.
Johor saw a 22.8% decline of demand in the sub-sale market in January to June 2020, although median price improved by 1.71% to RM370,000.
Demand for secondary homes in Penang fell 6.5% YoY in 1H20 with a RM300,000 median price, which was 6.99% lower than 1H19.
Selangor is the only major state with an increased demand by 3.5% YoY in 1H20, while median price tumbled 0.85% to RM380,000.
Premendran said iProperty.com.my experienced a reduction in user visits and property listings during the initial stages of MCO.
“However, user visits have since recovered following the implementation of Conditional MCO and by the end of the first week of June, organic searches for sub-sale property listings saw an upward recovery of +41%.
“The stamp duty exemption under the Home Ownership Campaign (HOC), the relaxation of real property gains tax for home sellers and the higher loan-to-value ratio should help uplift the property sector in the coming months,” he said.
However, Premendran does not expect to see a surge in demand in 2020 as it recorded a 2.5% decline in the 1H.
Additionally, he said, July and August data showed that demand in the sub-sale market is currently at a plateau, while November and December are usually low season for property sales.