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Housing prices expected to fall 10-15% due to COVID-19 and economic recession.

I know. The title will be very exciting for those who were waiting with lots of spare cash. Imagine that property you were waiting to buy for the past 12 months is now 10-15% cheaper? It will be very scary for someone who just bought a property last year and has just started paying for his mortgages for the past couple of months. What will happen to him?

Please do not be too alarmed, the property price cannot go down if the owner does not sell at a lower price. The owner will not sell at a lower price unless the person is in financial difficulties. So, if the property market crashes, I do worry about the state of the economy. As for the state of the economy, this was recently forecasted too for 2021. Read on yeah.

Coming back to the title. Someone from a prominent firm in the property industry is now saying that with the COVID-19 and the effects from the economic recession, there’s a possibility that the housing price in Malaysia may fall 10 – 15%. This is more serious that during the 1998 Asian Financial Crisis.

Article in NawawiTie Leung Property Consultants director and regional head of research and consulting Saleha Yusoff says that house buying interest will be low for the coming months. She said, “The situation is uncertain for property investors, even if you have money, why should you buy now if you are not under pressure to buy?” Saleha expects a decline in transaction volume similar to 1998’s downturn which was at -30%.  

She said that the property market depends a lot on economic growth. Back in 1998, the Malaysian GDP fell 7.4% in 1998 due to the Asian Financial Crisis, while The Malaysia Housing Price Index (HPI) followed suit and dropped by 9.4%. In 1999, the HPI declined 2.3%. She also shared that the COVID-19 has many associated risk factors such as depressed oil prices, ongoing tensions between the US and China, and domestic political instability.

According to data from the National Property Information Centre, there were 31,092 overhang residential units worth RM18.77 billion as at 3Q2019 compared with 10,897 units worth RM4.92 billion in 2015. Please do read the full article here: Article in

I think if we assume that we have lost 3 months this year due to the Movement Control Order (MCO), that’s 3 out of 12 months and it’s around 25%. This number is not too far away from Saleha’s forecast of negative 30%. Actually, the recovery will take some months. There will still be fewer visitors to the mall which is a good thing. There will still be fewer people going to the property sales galleries too simply because people are still going to be worried when they read about other countries’ COVID-19 numbers.

Perhaps we also need to see what happens once the U.S. starts to reopen their economies because this will also be setting the tone to the business confidence too. Most countries have decided that they will only reopen their economies once COVID-19 infections are negligible. President Trump has announced that they will start reopening for states which has sown a decline in new infections for 14 days. Happy understanding.

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Next suggested article: Buying few years earlier. Yields should follow later.

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

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