Residential property transactions down 44.7% in 1Q21

by S BIRRUNTHA / pic by MUHD AMIN NAHARUL

MALAYSIA’S residential property transactions dropped 44.7% year-on-year (YoY) in the first quarter of this year (1Q21), according to a report by PropertyGuru DataSense.

It noted the decline was mainly due to increased worries among property buyers over Covid-19 cases as well as softer-than-expected GDP performance.

The report found the overall number of property transactions across Malaysia, a majority of 61.2% were found to be made by first-home buyers (FHBs).

In three of Malaysia’s major property markets — namely Klang Valley, Johor, and Penang — FHBs outnumbered purchases made by investors by 13.2%, 65.2% and 0.08% respectively.

PropertyGuru DataSense MD Joe Hock Thor said due to the Covid-19 concerns and GDP performance, it was no surprise that there was lower confidence in the market and a YoY dip in residential property transactions during 1Q21.

“It is encouraging to note incentives such as the My First Home Scheme and the Home Ownership Campaign (HOC) have helped to drive FHBs to take that step towards homeownership during this quarter,” he said in a statement yesterday.

The report noted sub-sales were found to have dominated the market in the period with many property owners selling their assets at competitive prices.

This was especially prominent in the Klang Valley, which recorded a three-year high for sub-sale transactions at 83.72%.

Thor said for FHBs, buying on the secondary market means being able to get a quality home in a good location on a smaller budget.

“Sub-sale property has typically appealed to more seasoned investors largely due to the ability to place a down payment on the unit, making it easier for an investor to invest in several properties.

“The secondary market also allows greater access to the property, particularly landed units, in better locations. As landbanks are used up, new developments often must settle for more remote locations which may take investors a long time to see a return on the appreciation value,” he noted.

With a large portion of the nation’s workforce working from home since the start of the pandemic, the type of properties buyers are purchasing has also changed.

Transaction data from 1Q21 found homebuyers are favouring larger, more spacious units in the RM300,000 to RM500,000 price range.

Buyers preferred landed units over high-rise in 1Q21, with terrace houses making up 54% of transactions in Malaysia followed by condominiums/apartments (18%).

“Now that many employees no longer need to travel to the office every day, they can opt for areas further away with lower density and more spacious layouts that could comfortably fit an extra room for a home office.

“We observed the desire for larger, more spacious property has resulted in a shift towards terrace houses as well as properties in the fringes of city centres, driving up transactions in smaller townships in 1Q21,” Thor said.

He believes this trend is likely to continue into the second half of 2021.

Among the top 10 projects with the greatest number of transactions, this quarter were areas located away from city centres in self-contained townships such as Bukit Sentosa and Bandar Bukit Beruntung in Rawang, Selangor, and Bandar Putra in Kulai, Johor.