PETALING JAYA: Property marketplace company PropertyGuru Malaysia in its PropertyGuru Malaysia Property Market Report (MPMR) Q2 2023, revealed that property demand and supply have eased beginning this year with a sluggish economic outlook.
Based on the insights from DataSense, PropertyGuru’s market data and analytics platform, the report captured downward trends in the Sale Demand Index, with property enquiries decreasing by 5.6% quarter-on-quarter (q-o-q). While inflation is projected to be benign the coming months, global economic uncertainties have affected the appetite of Malaysian buyers for big-ticket purchases
Malaysia (PropertyGuru.com.my and iProperty.com.my), country manager Sheldon Fernandez (pic) said, “With Bank Negara Malaysia’s decision to raise the Overnight Policy Rate by 25 basis points to 3%, it will be difficult to see an uptick in property demand. Potential homebuyers are likely to delay their purchasing plans because of the higher borrowing costs and rising cost of living. Currently, it is still too early to gauge how much impact this will have on the market.”
The MPMR Q2 2023’s Sale Price Index tracked the asking prices of properties listed on propertyguru.com.my, which increased by 1.6% q-o-q in Q1’23. Sellers are likely not keen to lower prices against the backdrop of an uncertain economic climate. The global increase in construction costs paired with recent labour shortages have also pressured developers to hike their prices to cover the increased costs.
While Malaysia is projected to see a moderately lower economic growth this year, Sheldon said it is forecasted that there might be a more attractive property market as economic activities accelerate towards the second half of the year.
Following the boost in investments from companies like Tesla and AWS, as well as China’s RM170 billion investment commitment, he added this is likely to spur job creation and push infrastructure development in Malaysia in the near future.
From the report, the indexes in the rental market mirrored the trends in the property sale market, tracking a decrease in the Rental Demand Index by 6.3%. This is likely due to the substantial increase in rental prices, with the Rental Price Index rising by 4.7% q-o-q.
The rise in rental prices did not go unnoticed, and the Selangor state government has announced plans to look into the feasibility of expanding its Smart Rental Scheme to include low-cost housing.
“The decrease in rental demand, as highlighted in our report, could reflect that Malaysians are becoming even more cautious, perhaps opting to stay with family members and commute to the city to work instead of renting their own place. Again, the wait-and-see approach continues but it may be further exacerbated by the uncertainties ahead,” said Sheldon.
