Property prices dip slightly in 1Q21

PropertyGuru attributes the decline to buyers’ apprehension as they adopt a ‘wait-and-see’ approach

by S BIRRUNTHA / Pic by TMR FILE PIX

THE Malaysian property market registered a downtrend in overall asking prices, declining by 0.84% quarter-on-quarter (QoQ) and 1.79% year-on-year (YoY) in the rst quarter of 2021 (1Q21), according to PropertyGuru International (M) Sdn Bhd.

Its latest Malaysia Property Market Index (MPMI) report attributed the dip to buyers’ apprehension as they adopt a “wait-and-see” approach due to the recent surge in Covid-19 infections.

PropertyGuru Malaysia country manager Sheldon Fernandez (picture) said the imposition of the second Movement Control Order in the country has impacted commercial activity in the property market.

He expects market sentiment to remain cautious against the backdrop of economic uncertainties due to the pandemic, as the property market is expected to see fluctuating price trends in the coming months.

“However, the increased rate of vaccinations across Malaysian society is expected to bring more stability and improve consumer sentiment as the year progresses,” he said in a statement yesterday.

Fernandez noted that the government’s plan to extend the Home Ownership Campaign (HOC) until the end of 2021 is a welcomed boon to

the market, as it will continue to play an important role in spurring buyer interest as economic conditions begin to improve across the year.

He said the HOC has proven to be an effective stimulus to the economy and it has undoubtedly helped to reduce the burden of house buyers during this difficult time.

“If the government does decide to extend the duration of the HOC until this year ends, we encourage home seekers to take advantage of the available incentives, current low prices and conducive interest rates,” he added.

The latest MPMI report found that in Kuala Lumpur (KL), Johor and Penang, the overall asking prices dropped by 0.66%, 0.29% and 1.36% respectively QoQ, while Selangor sees asking prices remaining in the positive territory at 0.01%.

In 1Q21, KL’s YoY asking prices dropped by 5%, the highest recorded dip since PropertyGuru launched its market index in 2016.

Commenting on this, Fernandez said the property prices in these key markets are stabilising and adjusting to a more affordable range, and the continuous decline in asking prices makes this a buyer’s market now.

He noted that the price corrections across KL, Johor and Penang represent strong opportunities for the investment and purchase of properties.

“Despite the current challenges, Johor has strong potential for the future due to its symbiotic relationship with Singapore and the geographic advantage it offers in terms of lower-priced properties.

“Penang is often seen as the place for retirement for Malaysians and foreigners alike. It was recently ranked by Travel Awaits as the third best island in the world and first in Asia to retire in 2021,” he said.

While the overall asking prices in Malaysia have dropped both QoQ and YoY, in contrast, the MPMI report found the overall supply listings tracked on PropertyGuru saw a growth of 2.71% QoQ and a spike of 15.85% YoY in 1Q21.

In Penang specifically, the state recorded the highest spike in yearly supply volume, registering a 34.17% YoY increase, and a 1.19% QoQ gain, which is a positive growth for the third consecutive quarter.

The report noted that the robust turnaround of supply volume in key regions in Malaysia is likely due to the government’s decision to allow the construction and property development industry, along with other vital sectors, to continue operating during recent periods of heightened movement restrictions.

It also highlighted that this indicates developers are confident a recovery is on the horizon.

According to Fernandez, while the current environment of once again eased restrictions offers room for improvement in 2Q21, the property market is expected to put in a mixed performance for the duration of the year due to persistent uncertainties.

Nevertheless, he said consumer confidence in the property sector will regain as the country progresses through 2021, supported by a strong vaccination programme and favourable government incentives.