The rebounding of the property sector next year is expected following more substantial national economic recovery.
PropertyGuru anticipates gradual improvements in the market for the first half of the coming year before it begins to pick up in the second half.
These comments were made by Sheldon Fernandez, country manager of PropertyGuru, at the Property Market Outlook 2022 webinar yesterday.
PropertyGuru’s outlook for 2022 will continue to be cautious as Malaysia migrates from a pandemic to an endemic approach but leans towards optimism due to positive economic signals including improved vaccination rates, more long-term policies by governments and the opening of international borders.
The Malaysia Property Market Index by PropertyGuru showed that overall median asking prices, based on listings on the website, contracted by 2.16% between the second quarter of 2020 and the second quarter of 2021.
As of the third quarter of 2021, median asking prices have inched upwards by 9.9% quarter-on-quarter (QoQ) to 88.67 points from 87.86 points but reflect a 0.8% drop year-on-year (YoY).
Median asking prices in all four key markets have also increased in the third quarter.
Penang and Johor saw a QoQ price index growth of 1.38% and 0.15% respectively. Kuala Lumpur saw the biggest quarterly increase of 2.04% while Selangor recorded the largest annual growth at 3.57% YoY and a QoQ growth of 1.50%.
“Hopefully, this signal is part of nationwide market recovery following the ease of lockdowns and the resumption of economic sectors,” said Fernandez.
Despite the decline in the volume of transactions, median transaction prices have increased due to the type of properties transacted which are predominantly landed properties that carry higher price points.
PropertyGuru infers investors are taking advantage of favourable market conditions, including lower prices and interest rates plus RPGT waivers and other incentives to enter the property market.
Referring to the uptick in asking prices for Q3 2021, Fernandez said it at the very least signifies the stabilisation of prices and, hopefully, a start of recovery in the year ahead.
Nevertheless, he reiterated market confidence in 2022 will continue to be heavily influenced by positive or negative developments of the Covid-19 virus and acknowledged the uncertainty ahead with the emergence of the Omicron variant.
Any restrictions and initiatives in that respect will certainly impact the trend moving forward with consumers being wary until the virus is in full control.
PropertyGuru believes five key trends will impact the property sector in the year ahead.
1. The revival of buyer interest and consumer sentiment is expected to gradually improve alongside greater job security.
“Positive price indicators captured in the second half of 2021 allows us to foresee a more stabilised market in the first quarter of 2022 despite issues surrounding pricing mismatch and the pandemic,” said Fernandez.
Malaysian Institute of Estate Agents (MIEA) president Chan Ai Cheng concurred with gradual recovery as consumer sentiment improved and recommended buyers take advantage of low interest rates and adjusted prices.
2. An improved economic environment for the property sector is expected as businesses began to open at full capacity and colleges/universities resume according to the national recovery plan.
3. The revival of programmes needed to boost the real estate sector such as the Home Ownership Campaign (HOC), which will run until the end of this year, and which industry players hope will be extended as well as encompass the secondary market.
Separately, the Malaysia My Second Home (MM2H) programme is yet to be reintroduced but could potentially impact property trends in 2022.
“We think both will play a vital role in reviving the industry and addressing several issues such as the large numbers of unsold property in the country,” Fernandez added.
In the Budget 2022 announcement, the government planned to invest RM2 billion in terms of guarantees to banks via the guaranteed credit housing scheme. The scheme aims at assisting those in the gig economy to finance their homes.
4. Fernandez said landscape-changing progressive policies such as the above is a step forward in addition to the RM1.5 billion channelled towards housing programmes such as Rumah Mesra Rakyat.
5. The progress of ongoing megaprojects will excite the property market and add value to the surrounding areas.
This includes public infrastructure such as the LRT 3, East Coast Rail Link (ECRL) as well as talk of the Kuala Lumpur-Singapore High Speed Rail (HSR) coming back into the fold.
Commenting on the rising cost of building materials, Knight Frank Malaysia deputy managing director Keith HY Ooi said he anticipates a gradual increase in property prices moving forward.
He said the increase in material costs will eventually be passed down in some form to homebuyers and any changes in terms of values or demand, will trigger the interrelated primary and secondary markets.
This article was written by Adlene Hanna of PropertyAdvisor.my, Malaysia’s most comprehensive source of property data, property analytics and insights.
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