By SHAHEERA AZNAM SHAH / Pic By HUSSIEN SHAHARUDDIN
THE outlook for the local subsale property market appears subdued with the second implementation of the Movement Control Order (MCO 2.0) expected to weigh down demand in the first half of 2021 (1H21).
REA Group Asia (iProperty.com.my) customer data solutions GM Premendran Pathmanathan said the reintroduction of the MCO and the rise in Covid-19 cases have dented homeownership sentiment as movement in public spaces remains limited.
“As economies are highly connected to mobility, potential homeowners are not going out looking at houses and that might have dampen the market,” he said during a virtual presentation of iProperty’s 2020 Property Demand Analytics yesterday.
The report noted that demand for subsale residential properties fell by 1.3% in 2020 compared to the previous year with the median price for all types of buildings at RM520,000 or RM432 per sq ft.
Premendran added that banks remain cautious in approving loans, despite the higher loan applications approved in the last quarter of last year, which has also contributed to the soft housing market.
He said the soft tone will be alleviated by the economic policy and government’s measures introduced recently to spur the domestic market, including the stamp duty exemption which is part of Malaysia’s Home Ownership Campaign.
“The low Overnight Policy Rate (OPR), which saw four rounds of reduction last year to its lowest in the last 15 years to 1.75%, has kept people interested.
“The stamp duty exemption introduced in Budget 2021 also remains a factor. These two factors would be the strongest points when it comes to pricing and help the interest to stay in place,” he said.
According to iProperty’s latest data, housing demand in Kuala Lumpur (KL) contracted by 8.9% last year as more people continued to move away from city centres. A similar trend could be seen in Penang, with demand in George- town reducing by 11.9%.
“This trend of moving to the outskirts is mainly due to the reduction in people commuting to work as they are now allowed to work remotely, prompting many to look for bigger and more comfortable houses outside the city. “Some of the areas that are gaining traction are Kepala Batas in Penang, Muar in Johor and Puncak Alam in Selangor,” Premendran said in his virtual presentation.
“Due to the transformation of how we live now, people are continuing to move outside of KL to Selangor, which has been recording positive growth demand thanks to the affordable and larger spaces in the suburban areas,” he said.
Premendran said the pandemic has only accelerated what had been an ongoing trend of migration to the suburban areas.
“Although KL is the country’s main economic hub, it has been losing out on demand for property to suburban areas due to the latter’s affordable prices,” he said.
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