Property transactions number do not depend only on the primary property market. In fact, secondary market ratio to the primary market is typically around 80:20. In other words, most property transactions are all from the secondary market. This is why when we want to look at the property market, we cannot just rely on overhang numbers because overhang numbers are for completed properties which are still unsold and not classified as part of the secondary market.
My good friend Sr. Michael Geh, Senior Partner of Raine & Horne International Zaki + Partners Sdn Bhd has shared the below slides and they are really hot from the oven. If we refer to the first chart, this is the number and value of ALL property transactions stretching all the way from the Q3 2020 back to Q1 2014. This gives a very good overview of the property market for the last 6 years. If we look at the latest numbers from 2018 and 2019, we see one pattern. Q3, Q4 transactions are usually rising while the Q1, Q2 transactions are usually on a downtrend.
If we look at 2020, the trend seems to be repeating itself. Q1, Q2 is on a downtrend and Q3 has shown a V-shaped recovery for transactions. This chart is only for WP Kuala Lumpur, WP Putrajaya and Selangor. Let’s hope that Q4 will follow the trend of both 2019 and 2018 where Q4 is the highest within all quarters within the same year. These numbers are for ALL property transactions and thus may not so applicable for people buying homes to stay. For that, we refer to the chart after this.
This chart is ONLY for Number and Value fo Residential Property for WP Kuala Lumpur, WP Putrajaya and Selangor. The trend is a similar one as that of overall market. For 2018 and 2019, we could see a clear Q3 and Q4 showing an increasing trend while Q1 and Q2 showing a downtrend. In other words, if we believe 2020 will not be any different, we will be looking at another good quarter.
I think this is a good sign. It shows people having the confidence to buy, actually having the funds to pay for the downpayment and buy and more importantly, the banks having the liquidity to lend. So, it’s not true thaty banks have all stopped lending or rejecting all home loan applications. Please do click on the chart and refer to them yeah. If you think they are good, please do share this article.
By the way, if you have positive thoughts on the property market but you do not want to buy a property, it’s possible to buy a property related counter as well. Happy referring and deciding what you intend to do next.
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Next suggested article: V-shaped recovery in property transactions. Good news yeah