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Property Market Malaysia. Latest updates. Part 2.

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This would be part 2 of the Property Market Malaysia update.

MHPI: Point and Annual Changes in Major States 2010 – 2020

As usual, property owners want property prices to continue moving up and will gladly debate with anyone who wants them to sell lower… Meanwhile the potential buyers are always hoping for prices to keep falling or that occasional sudden huge drop in prices which they could take advantage of. Well, if we draw a line across 10 years or 20 years, then the line will show an uptrend even if it fell by double digit percentage points within one year in 1998.

Beyond just national average, let’s go deeper

Well, what about we look into the 4 major market places versus just the national average? Which among these are best performing really? Kuala Lumpur, Selangor, Johor and Penang. The latest chart from NAPIC as follows: KL, Selangor and Penang has turned NEGATIVE in 2020. Beyond this and also the occasional one year hiccup however, it has always been a positive number for all these four property markets yeah.

Beyond just states, look into years

Look closely and we do realise that perhaps the prices really ran too far away from its fundamental during 2011, 2012, 2013 and even 2014 because the increase in home prices were double digits every year! Salary increments were definitely not able to follow this kind of increase yeah.

Latest Numbers about the state of hotels (which has been hit hard thus far by COVID-19)

There are many hotels, especially the famous ones which has announced their closure due to COVID-19. (By the way, the problem may have started earlier for some of them and it definitely did not start with COVID-19). Please do look at the actual occupancy rates in 2019 when there were no COVID-19. We are certainly not talking about 80 or 90 percent occupancy yeah. The average was close to 60 percent for the whole of Malaysia but the highest was Pahang with 79 percent and even Kuala Lumpur is merely hovering above 60 percent.

My favourite state (I go there twice every year at least), Melaka is at 52 percent. Then, when we look at 2020, the total average has dropped to 31.6 percent. Oh Dear… Kuala Lumpur has dropped to just 26.7 percent. If you ask any hotels, occupancy of 31.6 percent is NOT enough to continue operations yeah. However, please note that this is average number. If it’s 31.6 percent, this also meant that there are hotels which are below this number and there are those which are higher too.

My Vietnamese friend is staying in a quarantine hotel in KL city centre and she told me that many of the room options offered were already taken. Perhaps this is also how some of these hotels are doing their best to survive… Quarantine hotel is a lifeline. Meanwhile all of them are waiting for the tourism sector to restart. Here’s that first travel bubble starting next week. Not Malaysia yeah. Read here.

Here are all the infrastructure projects

Usually, a good infrastructure project will be a catalyst to the developments. Here are all of them. Many have been delayed because of COVID-19 as well but generally, we can see the completion dates to be within 2021. A significant one which will link more places into Selangor and vice-versa would be the West Coast Expressway (WCE).

Beyond expressways, the ones I am looking forward to would be the MRT 2 (Putrajaya line) and LRT 3. I think these are the real catalysts because connectivity between more different places would always mean more choices. It does not always have to be the usual choices anymore. Happy choosing yeah.

For Part 1 of the Malaysia property updates, do read it here yeah: An update of the property market Malaysia. Update via charts.

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