Property market may need more time to fully recover post-pandemic


THE Malaysian property market is expected to take six months to two years to completely recover from the negative effects of the Covid-19 pandemic, according to Real Estate and Housing Developers’ Association Malaysia. 

Its president Datuk Soam Heng Choon said about 83% of 180 respondents comprising housing developers across Peninsular Malaysia expressed as such when polled. 

He added that six months means the recovery will be by March to April next year, and for 24 months, it will go into 2023 as anticipated. 

“According to the survey, 48% of respondents answered six to 12 months, while 35% of them answered 13 to 24 months. 

“A total of 13% of respondents answered more than 24 months for a full recovery of the property market to take place,” he said during a virtual media briefing on Rehda’s Property Industry Survey for the first half of 2021 (1H21) and its market outlook on 2H21. 

Nevertheless, Soam said Malaysian developers showed increased optimism about the outlook for the property industry and economic environment in the 1H22 compared to 2H21 through the survey findings. 

He noted that of the 180 respondents, 22% and 25% were optimistic about the domestic economic environment and business prospects for the industry in 1H22, respectively. 

Soam highlighted that this compares to only 6% who were optimistic about the domestic eco- nomic environment and 7% were optimistic about business prospects for 2H21. 

He added that developers are hopeful of industry’s prospects for 1H22, with 22% of respondents believing that the sales performance of the property market will improve, while 27% expect to see an improvement in residential sector growth. 

As comparison, only 6% were optimistic about the sales performance and 10% about residential sector growth in 2H21. 

He also highlighted that 76% of housing developers have also considered shifting their focus from building properties that are above RM500,000 each to below RM500,000. 

Meanwhile, on future launches and outlook for 2H21 and 1H22, Soam said a total of 15,076 units are planned to be launched in 2H21, of which 9,319 units are strata residential units and 5,549 are landed residential units. 

“Some 89% of respondents with future launches anticipate their sales performance for the first six months to be 50% or below. 

“Terengganu, Perak, Kedah, Perlis and Negri Sembilan planned to launch residential units within the 

RM250,001 to RM500,000 price range, while Selangor, Kuala Lumpur and Penang are launching residential units within the RM500,001 and RM700,000 price range,” he noted. 

Additionally, Soam said respondents were mostly pessimistic towards the outlook for 2H21 but are hopeful for brighter days in 1H22. 

He added that respondents hoped that the herd immunity will help accelerate the property market recovery and at the same time looked forward to campaigns such as the extension of Home Ownership Campaign (HOC) to assist home buyers. 

When asked whether the property market had finally “bottomed”, Soam said the performance of primary market property sales under the HOC had improved in 2020 despite the Covid-19 pandemic when compared to 2019. 

“If the economic recovery happens, we anticipate that the property industry will also improve. With an improvement in employment, salaries and also job stability, we believe there will be more buyers in the market. This recovery will continue into 2022. 

“That is why from the survey, we can see that most of the developers were more optimistic about 2022 than 2021,” he noted. 

On that note, Soam also opined that it would be a good idea for the government to purchase overhang properties and rebrand them as affordable housing. 

However, he warned against wasting taxpayers’ money without conducting a thorough study before adopting this policy as not all overhang properties might be suitable for rebranding. 

He also further noted that a low overhang in the property market would be ideal, but it might increase the cost of properties up if supply is constrained.