- The analysis highlights the demand for subsale homes for the year 2020 using iProperty.com.my’s user visits and property listings data for residential subsale properties in Malaysia with a particular focus in KL, Selangor, Penang and Johor
- Despite the decline in demand, terrace homes, condos and serviced residences experienced positive capital growth values at +2.6%, +1.4% and +2.4% respectively
- Among the major cities in Malaysia, only Shah Alam and Seremban recorded a positive demand at +1.66% and 0.92% respectively
- User visits recovered by +85% since its lowest point in April 2020 due to pent-up consumer demand pushing more buying interest. The increase in property demand is aligned to the increase in value of loan applications in Malaysia.
- The iProperty.com.my 2020 Portal Demand Analytics will include demand information for apartment, for the first time
KUALA LUMPUR, 26 JANUARY 2021 — iProperty.com.my today unveiled the 2020 Property Demand Analytics, an overview of subsale property demand using iProperty.com.my’s user visits and property listings data for subsale residential properties in Malaysia with a particular focus in KL, Selangor, Penang and Johor. The analytics was presented by Premendran Pathmanathan, General Manager of Customer Data Solutions at REA Group Asia, during an online video conference. The analytics looks at four property types: terrace house, condominiums, service residences and apartments for the very first time.
The national demand for subsale property in 2020 fell by -1.3% Year-on-Year (YoY). The demand for high-rise properties is down in line with prices while the demand for terrace houses remained positive at a capital growth of +2.6%. Among the major capital cities in Malaysia, only Shah Alam and Seremban recorded a positive demand, of +1.7% and +0.9%, respectively. KL City Centre (KLCC)‘s demand contracted by -8.9% with -11% capital growth decline whereas Georgetown’s demand contracted by -11.9% with -8.7% capital growth decline. As a result property prices dropped in both cities.
Even though the Movement Control Order (MCO) has dampened the country’s overall economic growth, property demand in the second half of 2020 began to recover as restrictions were relaxed. User visits to iProperty.com.my was at its lowest point in April 2020 after the MCO was imposed. However, it has since recovered as pent-up consumer demand pushes buying interest past new heights. As of December 2020, unique visits for subsale property listings saw an upward recovery of +85%, since MCO was first announced. Similar trends have also been observed for home loans applied – the increase in user visits to iProperty.com.my aligns with the increase in value of home loans applied by Malaysian consumers (as provided by Bank Negara’s Monthly Highlights and Statistics in November 2020).
Kuala Lumpur continues to record negative demand as population migration increases and now, as the work-from-home trend becomes the new norm, many people are moving to affordable housing in the suburbs of Selangor, leaving the property market in KL muted. The property demand for Kuala Lumpur dropped by -1.3% with apartment and flat user visits declined as well, as one of the groups hardest hit during the COVID-19 pandemic is the B40. Batu Caves tops the chart for the most in-demand area in Kuala Lumpur where its visitors for the flat segment increased more than double. Setiawangsa is another notable area on the list as many visitors were looking into properties with affordable price tags ranging between RM200,000 to RM300,000. Selangor, in particular its suburban areas, have benefited from the population outflow brought on by the COVID-19 pandemic. These residential suburbs offer larger properties with better value for money and have seen some of the fastest-growth in demand. Suburban districts like Puncak Alam, Dengkil, Semenyih to name a few, top the list for the most in-demand areas in Selangor. Despite the limited number of listings
in these areas, there is a strong following for these listings. Puncak Alam property seekers were looking for a family-sized terrace home between 1,250 sq ft to 2,000 sq ft in size and carrying RM300k to RM400k price tags.
Serendah recorded the biggest growth demand in Selangor in 2020. Interest was mainly contributed by apartments and flats priced below RM100,000 and with built-up sizes below 750 square feet (sqft). Similar to H1 2020, Selangor continues to be the only major state to record a positive demand of +3.2% while capital growth dropped marginally by -0.2%. Apartment prices have declined by -3.2% in line with the declining overall user visits and listing supply for flats as consumers, primarily the lower-income groups, are turning their attention to daily necessities instead.
Penang’s overall subsale property demand has contracted by -9.5% with the demand for service residences plunging by -20.4% in 2020. This contrasted sharply with the previous year as it recorded tremendous growth in 2019. The upcoming Penang Transport Master Plan (PTMP) could serve as a catalyst for the Penang property market. This project is set to boost transportation on the island and, by extension, the appeal of fringe neighbourhoods. Moreover, the PTMP is expected to create jobs that will have trickle-down effects on the economy.
Kepala Batas is the most in demand area in Penang with the number of visits doubling in 2020, bolstered by a number of large-scale mixed development projects in the pipeline. Balik Pulau saw a significant increase in the number of visits too. Its apartments and flats segments doubled their visits figures in 2020.
Johor recorded a double-digit decline across all property categories. However, terrace houses recorded capital gains as most of the home buyers in Johor still prefer landed homes. The outlook on Johor’s property market looks promising after the construction of the Johor Bahru–Singapore Rapid Transit System (RTS) has recently begun. Once completed, the project will bolster property prices in Johor Bahru as higher-income Malaysians working in Singapore have the option to stay in the southern state.
Muar and Batu Pahat are the top two most in demand areas with several residential projects in the pipeline. There was an uptrend in property prices in these areas in 2020 and the median prices are on par with areas within the Iskandar Malaysia region. Iskandar Puteri is the most in demand area in Johor with a +118.6% growth in demand. This can be due to its listing supply being reduced by more than half. Meanwhile, Kluang has recorded the second-highest growth in property demand for properties between RM100,000 to RM150,000 and RM300,000 to RM400,000.
Commenting on the release of iProperty.com.my 2020 Portal Demand Analytics, Premendran said, “We had expected to see a decline in property demand in 2020. The COVID-19 pandemic has shifted the way everyone lives and works and 2021 will be a challenging year as the property market is dependent on the economy of the country. Nevertheless, we believe that the property market will recover after the much anticipated roll out of the COVID-19 vaccine. It is also promising to note that the government has extended stamp duty exemptions to the secondary market under Budget 2021, further providing opportunities for property seekers to explore subsale residential properties. On top of that, the progressive reduction of the Overnight Policy Rate (OPR) and the reduction in Employee Provident Fund (EPF) contribution will help to ease home loan repayments which has sparked some interest in property purchase especially among middle and upper-income households.”
He continues, “In terms of demand data, it will provide insights into how people are looking at properties in times such as this. iProperty.com.my’s Portal Demand Analytics will help industry players understand where the market interest is shifting when it comes to supply and demand. Demand-driven data provides a clear insight into consumer sentiment of the property market. Government officials could benefit from the data when building affordable housing and in allocating targeted subsidies. Other relevant stakeholders (property agents, housing associations and the media) would be able to analyse the insights to understand the local market preferences better, which are reflective of the market demand. We hope the data presented will benefit everyone from homebuyers to industry players.”
You can download a copy of the iProperty.com.my 2020 Portal Demand Analytics at www.iproperty.com.my/newsroom
— End of Press Release —
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