NEW STRAITS TIMES. 23RD FEBRUARY: The rate of recovery of the property market will be determined by the state of the country’s economy, according to Shylendra Nathan, country manager, Malaysia (PropertyGuru.com.my and iProperty.com.my).
Nathan said the market may also face new complexities in terms of consumer confidence as a result of the altered social and commercial landscape caused by the ongoing Covid-19 pandemic.
He said that no incentives are currently available for buyers due to the expiration of the Home Ownership Campaign (HOC) on December 31, 2021.
“With little direct incentives for the property market in Budget 2022 and the expiry of the HOC just as the market begins to find its footing, there is no doubt that buyer confidence may be impacted and further pressure will be placed on financial indicators in the near term.
PropertyGuru Malaysia announced that its Malaysia Property Market Report (MPMR) Q1 2022, powered by PropertyGuru DataSense, showed a significant increase in the Rental Demand Index in Q4 2021, with a 30.53 percent quarter-on-quarter (QoQ) and a 57.91 percent year-on-year increase (YoY).
The Rental Demand Index, which represents the proportion of interested property renters based on inquiries for rental units listed on PropertyGuru.com.my, is expected to rise further in the current quarter as consumers shift their focus away from buying and toward renting.
“The increasing demand for rental properties could be indicative of shifting priorities among home seekers who face difficulties in securing home loans in the current climate, as banks continue to be conservative about loan approvals. As such, potential homebuyers are temporarily putting their purchasing plans on hold to ride out this period of economic volatility,” he said.
Nathan believes that potential homebuyers are opting to rent homes to satisfy their upgrading needs or pursue their desired lifestyle improvements, all while regaining confidence in making large property purchases.
The shift in consumer priorities is also reflected in MPMR’s Sale Demand Index, which fell 36.56 per cent QoQ and 7.7 per cent year on year during the fourth quarter of last year.
Aside from difficulties in obtaining adequate financing and an increased focus on the rental market, factors that may have contributed to the sluggish home-seeking activity in Q4 2021 include consumers’ preoccupation with year-end festivities and recent flooding events.
“The recent flooding might have triggered home seekers to reassess their buying plans,” Nathan said.
Overall, the property market continued to improve gradually, as evidenced by the MPMR Q1 2022.
Despite a 0.19 per cent QoQ drop in Q4 2021, the Sale Price Index, which measures seller confidence through asking prices listed on PropertyGuru.com.my, continued to rise by 0.14 per cent YoY.
According to Nathan, there has been an increase in overall property market activity in Malaysia as a result of the liberalisation of movement controls and economic activity in Q4 2021.
“We believe that the market will remain cautiously optimistic about continued improvements in the general market environment as the year progresses, on the back of better economic conditions and higher vaccination rates,” he said.