THE MALAYSIAN RESERVE. 10TH FEBRUARY: Several factors must be weighed to determine which is best suited for the buyer
Among a homebuyer’s considerations, besides budget and location, is whether to get a high rise or landed property.
Each of these types of property has its pros and cons, and to determine which is best suited for the buyer’s situation, several factors must be weighed, including maintenance, facilities and convenience.
Moreover, the Covid-19 pandemic had radically changed people’s lives. Because of the many series of lockdowns, homes have become much more than just a space to sleep in.
According to an online survey done at the end of 2022 to find out whether the Movement Control Order (MCO) has affected homebuyers’ preferences especially when it comes to their next purchase, 34% of Malaysians chose condominiums while 28.1% selected terraced houses.
This was followed by semi-detached houses (13.1%), bungalows (9.8%), serviced apartments (8.2%), apartments (4.2%), townhouses (2.3%) and co-living (0.3%).
Real estate agency CBRE-WTW’s MD Foo Gee Jen said the shift in preference from landed to high-rise properties or vice versa would depend on the risk perception of the occupiers.
He said buyers now prefer to live in high-rises as they view it as having stricter access control, which is an advantage for health and safety enhancement.
“Living in a self-sufficient mixed-use development may also be more convenient amid recurring lockdowns,” he told The Malaysian Reserve (TMR) recently.
Factors Affecting Home Seekers’ Decision
He added that given the economic challenges resulting from the pandemic, housing affordability would also play a part in the decisions of home seekers.
“Between landed and high-rise properties, the current market trend suggests that there is more rigidity in the base price and rental rate of the former while the latter’s base price and rental rate are wider in range, usually determined by unit size and features,” he added.
Foo noted that the shift in buyers’ preference from landed to high-rise properties usually involves moving from non-stratified or non-gated landed houses to stratified high-rise properties.
This can be seen among first-time, independent dwelling upgraders, young families and an emerging group of empty nesters.
He explained that for the younger demographic and young families that wish to upgrade from their existing landed houses in older but non-gated communities, they appear to still prefer landed houses but will demand good facilities and security.
However, another study showed a different trend among homebuyers, where there is more demand for landed properties.
This was reflected in Malaysia’s property transaction data from the first quarter of 2021 (1Q21), which found that homebuyers are favouring larger, more spacious units between the RM300,000 and RM500,000 price range.
Buyers preferred landed units over high-rises in 1Q21, with terrace houses making up 54% of transactions in Malaysia followed by condominiums or apartments (18%).
PropertyGuru DataSense MD Joe Hock Thor said 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.
Over the years since the pandemic, he observed that 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.
“We believe this trend is likely to continue in the next couple of years, post-pandemic,” he said in a statement.
Furthermore, 61.2% of the overall number of property transactions across Malaysia were found to be made by first-time homebuyers in the country’s three major property markets, namely Klang Valley, Johor and Penang.
According to the report, first-time homebuyers outnumbered the purchases made by investors in those markets by 13.2%, 65.2% and 0.08%, respectively.
“However, it is encouraging to note that incentives such as the My First Home Scheme and the Home Ownership Campaign have helped to drive first-time homebuyers
to take that step towards homeownership during this quarter,” Thor said.
Privacy Versus Facilities, Amenities
In terms of privacy, Bangi Avenue 2’s residential president Arif Hazwan Ab Wahab commented that the privacy one gets on a landed property is unmatched.
“You can do anything you want without fear of your neighbours eavesdropping. Fortunately, noise is significantly reduced since households are comparatively far from one another,” he said to TMR.
Moreover, with a large backyard, the house would be situated away from busy highways, minimising or eliminating environmental noise.
“Therefore, if you hope to have a more tranquil life in which you can unwind peacefully at night, landed property is the way to go,” said Arif.
Landserve Sdn Bhd MD Chen King Hoaw concurred, saying that homebuyers prefer landed homes over condominiums.
“Although communal living in high-rise developments offer better security services as well as amenities such as swimming pools and landscaped gardens, they usually come with a monthly maintenance cost that is higher than that of most landed schemes, except for landed strata developments that may be more comparable,” he commented.
However, regardless of landed or high-rise properties, Malaysian Institute of Estate Agents (MIEA) CEO Soma Sundram said property enquiries from new buyers have increased significantly after MCO was lifted last year.
“The increase in enquiries after the lockdown is not a surprise. With the market opening up in 4Q21, correspondingly the demand went up as movement became easy and people could look at properties again,” he said, adding that there is a rise in the numbers of queries for both landed and high-rise properties.
Affordability Should Be Buyer’s Main Priority
Meanwhile, MIEA president Chan Ai Cheng pointed out that the most important thing when buying a home is buyer’s affordability.
“Buyers need to figure out what is affordable for themselves. For example, if it is 400 sq ft or less, but causing a hole in their pocket, then it is deemed as an unaffordable house,” she said.
She reminded buyers to consider whether they can afford all the potential payments and if they are getting the best rates when it comes to financing the purchase.
Chan said although Bank Negara Malaysia is expected to raise interest rates further in 2023, the interest rates in the country are still relatively low and have only returned to the level of 2019, hence homebuyers are not heavily impacted by it.
She added that when the political and economic situations stabilise, as well as the job market, and the market regains confidence, the industrial market will also recover accordingly.
“The industrial data for the third quarter of this year released by the National Property Information Center has shown positive trends in the property sector.
“Especially after the 15th General Election and the Unity Government was established, we can see that the people’s confidence in the property market has returned, and the overall outlook for next year is optimistic,” she explained.
Even though the market would be facing headwinds in the coming years, such as the growing shadow of a global economic recession and continued high inflation, experts are adamant that homebuyers would still be looking for their desired homes.