Do I believe in predictions for the property market? What about for a strong property market recovery? Well, sincerely, not really unless the prediction corresponds to my own prediction. Haha. Anyway, it’s not just me. When we believe about something, we will always find evidence to validate what we believe. Now do you know why as soon as you start reading negative news, FB will start bombarding you with even more negative news? Not just negative news, can even be about your political affiliations too.
Now, what will be happening to the property market then? Is there a possibility of a strong property market recovery? Let’s read the press release by Juwai-IQI below.
Press release: INDUSTRY PREDICTS STRONG REAL ESTATE RECOVERY IN 2022 WITH 10.6% PRICE GROWTH: JUWAI IQI SURVEY
The new Property Survey and Index Q3 2020 by Juwai IQI, which is Southeast Asia’s largest proptech group and operator of real estate super-brands Juwai and IQI Global, reveals that the Malaysian real estate industry expects a strong market recovery in 2022, while forecasting national price growth of 10.6% through the third quarter of 2022, despite a -4.8% fall over the next 12 months.
THE SURVEY A total of 344 Malaysian real estate agent panelists participated in the survey online between 16 June and 10 August 2020.
KEY FINDINGS Strongest Price Growth in Penang and PerakThe industry has forecast that the states with the strongest forecast price growth over the next two years are Penang and Perak, with price growth of 15.9% and 14.3%, respectively. Kuala Lumpur and Selangor are predicted to have the lowest forecast price growth over the next two years, with a lower but still impressive 8.5%. This is despite the National Price Expectations Index showing a downwards trend with a -4.8% fall over the next 12 months, before climbing again to post a cumulative growth rate of 10.6% over the next two years.
Lower Rental Rates Now, But to Increase in 2022 On a nationwide basis, rents are expected to drop 3.8% over the next 12 months, before recovering to post 7% growth through Q3 2022. Perak is projected to see one of the highest increases in residential rents over the next two years at 16.7%. Kuala Lumpur and Selangor are projected to see a 4.4% increase in residential rates.
More First Time Home Buyers The share of new home transactions attributed to local first-time buyers increased by 4 percentage points to 34% this quarter, while the foreign buyer share fell by -7 percentage points to 14%. Local upgrading buyers and local investors maintained their shares at near equal levels of approximately 25%.
First-time buyers have claimed the largest share of the market in Sabah, where they account for 39% of transactions. In Johor and Sarawak, first-time buyers account for 36% of transactions. Local investors take the largest market share in Perak, where they account for 36% of purchases. Foreign buyers are most visible in Penang and Johor, accounting for 17% of transactions in both places.
Spike in Local Investors Expected Perak, Johor, and Sarawak are the states where the industry has the highest expectations for growth in local investor transactions. In Perak, 78% of respondents expect local investors to complete more transactions in the year to come. In Johor and Sarawak, the corresponding numbers are 69% and 65%, respectively.
Kashif Ansari, Juwai IQI Executive Director, said:“COVID-19 and the resultant economic slowdown has had a significant impact on the real estate industry’s outlook for residential prices over the next 12 months. The survey findings also show that the real estate industry believes the market will recover. Higher price growth and rental yields are projected.
“In fact, COVID-19 has made everyone think deeply about how and where they want to live. People have been spending so much time at home and now have a very clear vision of what they want. In many cases, what people want now is different than a year ago. Now, your home has to also be your office, your school, your gym, and your restaurant. The home has now become a hub for every activity.
“The fact that first-time local buyers have increased their share in transactions demonstrates the need for homeownership. This also shows that the government’s stimulus measures meant to support this group have been effective. The Government has made it easier for first-time buyers to acquire their first home with the reintroduction of the Home Ownership Campaign.
“The survey findings reveal that the appetite for property is resilient despite Coronavirus-related restrictions. Recovery and a return to growth are coming by 2022.”
— end of press release —
Briefly, the press release is saying that there’s a possibility of a strong property market recovery, not so soon though. We believe what we believe and we should take actions yeah. So, if we believe there’s a possibility of a strong property market recovery then… happy searching and viewing.
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