Property market Malaysia? Just one slide to show us what’s happening

Property market Malaysia? Just one slide to show us what’s happening

My good friend, Henry Heng (a valuer by profession) sent me the slides from NAPIC. He is an amazing speaker and I love his sharing which is always full of numbers. Follow his sharing in LinkedIn here. He is active and has a lot of followers too. Henry Heng, Valuer in LinkedIn.

I picked just one slide for this first article about the property market in Malaysia. For an overview, we just need to know two things when it comes to property market dynamics yeah. When times are not so positive for the property market, people tend to hold back their purchases. That’s why we will see total transactions falling tremendously. Just take a look at the years during Covid-19. No one could do anything…

How long can people gold back from purchasing that property they needed?

Not everyone can hold their purchases forever. If the baby is coming and one needs a bigger property, perhaps it’s possible to wait one year? If the wife and the in-laws are not doing that well in terms of communication, for the sake of everyone, it’s better to move earlier and not later. If one has already changed job and the new office is 45km away from home, it’s very important not to waste too many hours from traveling to and fro daily. This is why unless the whole economy is collapsing, else, the number of transactions will continue to happen.

Working from home and staying in hometown?

People cannot work from home forever. (I meant staying in hometowns and not coming back to Greater KL). Feel free to google for what’s happening at google too, okay? Banks were already pushing for working from office. Meanwhile more organizations are also moving back towards more days in office even if some are still offering flexibility. As for people who kept thinking working from home is best, then just make sure your salary is not too high versus some other people from other countries who can do the same role for a lower pay yeah. Since it’s working from home anyway, so the company would choose to pay to the one who could do the same for lower pay lah.

Meanwhile, more people are also okay to move further away

People also learnt that if they are allowed to work from home, then they do not necessarily need to stay near their office anymore because they may not be required to go back to office every day too. Just look at the mega townships located probably 30km away. The ones which many said, was very far.’ Drop by their sales galleries to understand who are the people there yeah. Start noticing that this is also a trend and not everyone is rushing to stay within the city centre only yeah.

Now, what is happening to the property price then? Why up so much versus transactions?

From the above chart, it’s plain to see that transactions have just increased 8 percent from the same period a year ago but the prices went up nearly 3 times. Why move up so fast? Isn’t the market doing badly? The oversupply is still there, right? Actually, the answer to both could be a Yes. Properties in some areas are really not in demand. It meant that the oversupply numbers for these areas are actually not moving much. So, where does the transactions come from?

Well, please do visit some sales galleries, especially those in popular neighborhoods yeah. Plus even the sales galleries in some MEGA townships which are considered ‘far’ away yeah. There are just a few of these mega townships of a few hundred acres yeah. Once you have done this, you may realize that it’s true that people are accepting slightly higher prices… this is why transactions also show an increasing trend for prices too.

Meanwhile in the secondary property market, when people love a certain area, they could usually accept a slightly higher price since the monthly repayment is unlikely to be huge difference for an extra RM20,000 for example. That’s just maybe RM100 extra for the monthly repayment anyway. These buyers would never pay higher for an area or type of property they dislike but paying extra for the neighborhood they like is a given. This is why prices usually move upwards when transactions happen.

Will go into more analysis in my next article on these latest numbers from NAPIC. Lots more to share!

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