When average rent moves upwards, what is happening in the market? Oversupply?
Two weeks ago, I was asked again about the state of the property market. As usual, if it’s someone I do not really want to spend my time in explaining, I just say I have no idea but I will definitely be looking at the property market for my next property. The person said, “but there’s an oversupply!” I just smiled and said, it’s okay. It’s just about managing the risk and to buy after sufficient due diligence. I do not think the person agreed but WHO CARES? Haha.
Today, the below report came out. It talks about the average rent in Malaysia and it was derived from 70,000 residential rental transactions. Take a look yeah.
Article in kopiandproperty.com The average rent in Malaysia in the second quarter was RM1,995, up 3.9% from the prior quarter and 2.9% from a year earlier, according to the new Q2 2024 IQI Malaysia Home Rental Index report, which was released today by Juwai IQI Co Founder and Group CEO Kashif Ansari.
“This Malaysia Home Rental Index by IQI analyses over 70,000 residential rental transactions between 2018 and Q2 2024,” said Mr. Ansari. “It provides insights into new leases signed each quarter and offers valuable information on current rental market trends for tenants and investors.
The IQI Malaysia Home Rental Index
Source: IQI data on more than 70,000 residential rental transactions since 2018.
Read here for the full report: Article in kopiandproperty.com
Rental is always a better sign about the state of the property market
Property prices could go up pretty quickly. When the market is hot, one unit within a development of a few hundred units could be sold for extra RM10,000 and the next unit another RM20,000 and then the next unit an extra RM20,000 and the reason why this could move is because an extra RM20,000 is just an extra RM100 mortgage per month for a 30-year loan. This is why speculative purchases may distort the market and the last person to come in will definitely be losing money when they sell since they bought at the peak.
However, rental is gradual. We cannot simply increase rental every month just because the one next door is renting out their unit for an extra RM100. In other words, if rental is moving upwards, it meant that the demand is increasing healthily and the owners are now able to slowly increase their rental. In other words, demand is strong enough that owners are able to increase their rental. Of course when rental is going down, it will also not be immediate too. So, I think rental is a good determinant of the property market dynamics.
Do not miss all the important happenings whether in property or other investments! It takes 5 seconds to sign up.
Sign up for daily investment news updates (FREE since Nov 2013 and FOREVER).
Alternatively, Follow me on Telegram here.
Please LIKE kopiandproperty.com FB page to get daily updates about the property market beyond kopiandproperty.com articles.
Discover more from kopiandproperty.com
Subscribe to get the latest posts sent to your email.
