PROPERTYGURU Malaysia is seeing slow improvement in the real estate market as consumers grapple with lingering post-Covid-19 effects.
PropertyGuru.com.my and iProperty.com.my country manager Malaysia Shylendra Nathan (picture) said: “Potential buyers are cautious” with their attention on rising inflation and seeking refuge in economic stability and job security.
Buyers may be hesitant to move forward with their purchasing plans until there is political and economic stability as they take a “wait-and-see approach, he said in a statement with the release of its Malaysia Property Market Report Second Quarter 2022 (2Q22).
The statement said based on its High-rise Property Sale Price Index, prices for stratified properties have fallen by 0.23% quarter-on-quarter (QoQ) in 1Q22 while registering only a 0.51% year-on-year (YoY) increase.
Supply of high-rise properties, however, continued to increase by 3.25% QoQ, and 18.24% YoY, underscoring a deep price mismatch against buyers’ appetite.
Millennials are expressing a desire for well-located condominiums but they lack the resources to buy and maintain these units, said Shylendra.
He said there is potential for demand to turn around in the coming quarters as wealthy Malaysians use the property as a hedge against inflation.
With the advantage of land value being factored in, rising prices of landed units offer larger margins for capital appreciation over the long term, he said.
According to Bank Negara Malaysia’s (BNM) Financial Stability Review Second Half 2021, there are visible improvements in the overall economy and the financial sector but ballooning completed unsold units remain a key issue for the housing industry.
The report stated that over 180,000 units in the housing market remain unsold, reflecting pre-existing affordability issues worsened by the pandemic, which is consistent with the online property company’s upward supply trend.
Landed units continue to be the preferred option, although potential buyers are dampened by affordability and financial difficulties, resulting in lower demand.
Besides, with the recent increase in BNM’s Overnight Policy Rate from 1.75% to 2%, existing and future mortgage interest would be affected, further dampening buying confidence, so sellers would have to take the initiative to incentivise buyers with attractive packages, he said. — Bernama / pic source: iproperty.com.my