Malaysians adopt ‘wait-and-see’ approach in buying homes

by S BIRRUNTHA / pic by HUSSEIN SHAHARUDDIN

MALAYSIANS are more realistic and cautious when it comes to buying properties with 42% adopting a “wait-and-see” approach in anticipation for a better deal in the future.

PropertyGuru Malaysia country manager Sheldon Fernandez said many buyers are anticipating a drop in house prices as developers are seen adjusting their pricing strategy while launching more affordable homes.

He cited that according to Kenanga Research, over 50% of new launches in the third quarter of 2020 (3Q20) were priced below RM300,000.

“With more affordably-priced properties available in the market, property owners who are desperate to let go of properties have no choice but to reduce the asking price, thus price trends of properties in the secondary market will be fairly linear,” he said in a statement yesterday.

The PropertyGuru Malaysia Consumer Sentiment Study H1 2021 findings also revealed an increase within its property sentiment index, from 39 points in the second half of 2020 (2H20) to 42 points in 1H21.

The report stated that the contributing factors include current real estate satisfaction, positive outlook on property climate, favourable interest-rate environment, positive government efforts and favourable price outlook.

Fernandez said with the prospects of a mass vaccination programme slated to be rolled out early this year, it could be an antidote to the uncertainties currently faced by the market as Malaysians brave through another wave of infections.

“Nevertheless, a sense of acceptance of the new normal and the incentives currently in place have reflected a slightly improved sentiment in our recent findings,” he added.

On the other hand, the study also found a total of 35% of the respondents (mostly aged between 22 and 29) have expressed interest in owning a property as they see opportunities in the current favourable environment.

The report stated that this was spurred by historically low-interest rates, incentives from the extended Home Ownership Campaign (HOC), and attractive prices and packages offered by developers.

As for home ownership challenges, 52% of the respondents said the difficulties in forking out the down payment for property purchase remains the main barrier that stops them from applying for a home loan.

Meanwhile, other top barriers in taking a home loan include job instability (46%), unfamiliarity with paperwork (33%), poor credit history (27%) and lack of supporting documents (25%).

As it is, the government has allocated the largest national budget at RM322.5 billion to spur economic growth.

Over 500,000 new jobs for Malaysians are also expected to be created within the next two years.

Despite the short-term pain during the time of uncertainties, PropertyGuru said the country’s economy will be on the mend with forecasted improvements within the property sector in 2H21, after the mass vaccination programme.

“The property market is poised for a gradual recovery in 2021, driven by a better economic outlook and historically low-interest-rate environment.

“This is reflected by Bank Negara Malaysia’s recent decision to maintain the Overnight Policy Rate at 1.75%, as the central bank sees continued recovery in the global economy. However, downside risks remain amid uncertainties surrounding the Covid-19 pandemic,” Fernandez said.

He added that the property market will also likely be seeing increased sales in 1H21 as the HOC ends on May 31, 2021.