Sign of Market Recovery Nationwide with an Uptick in Property Asking Prices
PropertyGuru: Uptick in Property Asking Prices Hints at Nationwide Market Recovery
- Accelerated rate of vaccinations and reopening of economy encouraged growth in asking prices
- Property supply volume saw sharp decline of 6.51% due to delay in new project launches and seller hesitancy
Kuala Lumpur, 18 November 2021 – PropertyGuru Malaysia announced that its latest Malaysia Property Market Index (MPMI) report registered a quarterly growth of 0.92% in asking prices in Q3 2021, signaling the start of a nationwide market recovery following the ease of lockdown and resumption of economic sectors.
This uptick in property asking prices is observed across four key regions covered by the MPMI, namely Kuala Lumpur, Selangor, Penang, and Johor, which observed a year-on-year (YoY) increase of 1.56%, 1.5%, 1.38%, and 0.15% respectively. This marks the first time that all four key markets saw an increase in asking prices since the impact of the COVID-19 pandemic took hold in Q2 2020.
Sheldon Fernandez, Country Manager of PropertyGuru Malaysia shared, “The accelerated rate of vaccinations, paired with the reopening of the economy are the catalysts that drove the recent increase in asking prices. With our nation emerging from the COVID-19 battlefield stronger and more resilient than ever before, consumer confidence is naturally rising, and this is expected to result in a gradual but steady return of demand for property in Malaysia.”
“While properties in some key markets in Malaysia have fluctuated between positive and negative price movements since Q2 2020, the overall YoY trend has been declining, which coincides with the onset of the lockdown restrictions and limitations on commercial activity. Hence, while this recent uptick in asking prices hints at the recovery of Malaysia’s property sector, it will be some time before real estate values return to pre-pandemic levels,” he added.
Sharp Decline in Supply Due to Project Delays and Seller Hesitancy
The PropertyGuru Malaysia Property Supply Index, which tracks supply via property listings on the website, registered a sharp decline of 6.51% in supply volume in Q3 2021, quarter-on-quarter (QoQ), despite a positive gain of 11.94% the quarter before. In the four key markets covered by the MPMI, Kuala Lumpur, Selangor, Penang, and Johor observed a QoQ drop of 7.3%, 2.63%, 13.79%, and 13.36% respectively, in terms of property supply volume.
The downward trend in supply volume in the primary sector may be attributed to the halting of construction work during the lockdown in Q3 2021, which led to delays in project deliveries and new development launches. Meanwhile, the temporary decrease in supply volume from the secondary market is most likely driven by hesitancy among sellers in the market, due to low buyer appetite and downward pressure on house prices that were seen in previous months.
“The sharp decline in property supply volume observed in Q3 2021 serves as a reminder that the property sector is still reeling from the effects of the pandemic. Nonetheless, it is encouraging to note that listing activity on the PropertyGuru website has already picked up pace in Q4 2021. We can expect a change in this trend by this year-end, if property prices continue to stabilise or move upwards in the coming months,” said Sheldon.
He added, “Overall, the property market is expected to see a gradual but steady improvement in the months ahead, in tandem with the overall economic activity, improving sentiments on job and financial stability, as well as the growing percentage of fully vaccinated individuals. However, in the near term, market confidence will continue to be heavily influenced by any positive or negative developments on the COVID-19 front. Until the pandemic is fully under control, we should remain cautious – not just in terms of the outlook on the market, but also in our day-to-day lives by strictly following SOPs – as we are not completely out of the woods yet.”
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