MIEA: 2021 PROPERTY MARKET REPORT GIVES SIGNS OF A RETURN OF CONFIDENCE IN THE PROPERTY MARKET
— start of media release by MIEA —
Rising House Price Index
The recently launched property market report shows strong recovery in 2021 over 2020 and gives signs of a return of confidence and envisages to an improved property market in 2022. More importantly the public must take heed of the fact that the house price index has seen a significant increase to RM320,000 compared to RM295,000 in 2020 said MIEA president Ms Chan Ai Cheng.
Increase transaction volume
The volume of transaction for 2021 rose by 1.5% to 300,497 units with a value of RM144.87 billion a 21.7% increase over the same period last year. Though the percentage increase of 1.5% may seem small it’s important as it signifies recovery. The last quarter of 2021 saw a sparked increase in the volume of transaction amounting to 99,462 units, which we believe could be largely due to the Home Ownership Campaign(HOC) incentives which ended in December 2021.
Residential Sector’s contribution
As in previous years the residential sector was the strongest contributed 66.2% with 198,812 transactions with a value of RM76.9 billion. Agriculture was second with 18.9% of the transaction. Commercial came in third contributing 7.5% with 22,428 transactions. This trend remained same as in previous years. The following states contributed slightly in excess of 50% of the total transaction namely Selangor 61,507, Perak 36,893, Johore 36,145 and Kedah with 25,077.
In 2021 a total of 43,860 new residential properties were launched comprising of 31,678[43.3%] Landed properties and 13,182 (25.9%) high rise. Only 39.3%of the units was sold, resulting in an overhang of 36,863 units which is the highest in the last 5years. This will be a great concern to developers as this effects cash flow. However, we need to caution buyers not to be overly alarmed by the rise in the overhang numbers as this may not be a reflection of how the property market is doing. Some properties are just not cleverly developed and hence there is poor demand and this has nothing to do with whether the market is doing well or not.
What’s the reason for overhang?
MIEA is of the view that the overhang is largely due to the lack of research resulting in the poor understanding on supply versus demand, mismatch on the type of properties price range that buyers are seeking in specific locations etc. Local authorities should perhaps put a pause on similar developments in vicinity of high overhang units to allow time for the market to absorb the units or to relook into the development composition before approvals are given to proceed. We feel it is time for the government through KPKT to intervene by adopting stricter guidelines or SOP towards building approvals at the state level to provide check & balance and not to waste resources which may run into billions.
There is a new trend where 15,332 [35.0%] units were in the less than RM300,000 price range category, 15,723 [35.8%] in the RM300,001- RM500,000 category, 11,875 units in the RM500,001 – RM1 million category and 930 units in the above RM1million categories. Interestingly 70.8% units were launched below the RM500,000 category which is in the affordable category and clearly shows a shift by property developers in developing affordable homes, heeding calls by the government.
Ms Chan request developers who are struggling with overhang units to work with Real Estate Agencies to help ease in the sale of these units especially small developers who normally use their own inhouse sales team to market. Appointing estate agents to help is a logical choice as they are trained and have the relevant experience. Be sure to only appoint those who are registered with the Board of Valuers, Appraisers, Estate Agents& Property Managers Malaysia (BOVAEP).
In conclusion Ms Chan said that Real Estate practitioners requires data to professionally represent the public at large and NAPIC data is important for the 30,000 real estate practitioners and requests that this data be made available for all practitioners on a timely basis and thanked JPPH for playing an important role in compiling and appreciative for releasing this year’s report early.
Property investment is not ‘simply buying’
As advised before always do your own research and let location specific and type specific data guide your decisions. Broad or generic comments takes the average and may not be reflective of the type of property or the location you have in mind to purchase and may misguide you. While it may seem like things are heading southward, you can be rest assured that properties well located are still fetching top prices and expressed that the public can look forward with confidence to buy and invest in properties given that values are already on the rise after a slump in the last two years. It’s never too late or early to enter the market. Importantly is always do your research.
—— the end —–
Property News Malaysia? 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. Else, follow me on Twitter here.
Next suggested article: 5 Must-Do steps for property investment.
End Image by Alexandr Podvalny from Pixabay
You must log in to post a comment.