Press Release: PropertyGuru- 58% YoY Increase in Rental Demand as Potential Home Buyers Await Economic Stability
- Substantial increase in rental demand and sluggish home seeking activities observed in Q4 2021, as home buyers face difficulties in obtaining loans in the current climate
- Property market remains cautiously optimistic with uptick of 13.54% QoQ in property supply and slight dip of 0.19% QoQ in property prices
- Expiry of HOC impacts buyer confidence and puts further pressure on financial indicators in the near term; thus, property market is expected to improve more gradually
Kuala Lumpur, 23 February 2022 – PropertyGuru Malaysia announced that its Malaysia Property Market Report (MPMR) Q1 2022, powered by PropertyGuru DataSense, registered a substantial increase in the Rental Demand Index in Q4 2021, with a hike of 30.53% quarter-on-quarter (QoQ) and 57.91% year-on-year (YoY).
The Rental Demand Index, which represents the proportion of interested property renters based on inquiries for rental units listed on PropertyGuru.com.my, is expected to grow further in the current quarter as consumers are shifting their focus from buying to renting.
Shylendra Nathan, Country Manager, Malaysia (PropertyGuru.com.my and iProperty.com.my) shared, “The increasing demand for rental properties could be indicative of shifting priorities among home seekers who face difficulties in securing home loans in the current climate, as banks continue to be conservative about loan approvals. As such, potential homebuyers are temporarily putting their purchasing plans on hold to ride out this period of economic volatility. Instead, they are opting to rent homes to satisfy their upgrading needs or pursue their desired lifestyle improvements, while rebuilding confidence towards making large property purchases.”
The shift in consumers’ priorities is also reflected in MPMR’s Sale Demand Index, which registered a sharp drop of 36.56% QoQ and 7.7% YoY during the final quarter of last year. Factors that might have contributed to the sluggish home seeking activity in Q4 2021 – aside from difficulties in obtaining adequate financing and increasing focus on the rental market – include consumers’ preoccupation with the year-end festivities and the recent flooding events which might have triggered home seekers to reassess their buying plans.
Property Market Remains Cautiously Optimistic
Overall, the property market continued on a gradual trend of improvements, as captured by the MPMR Q1 2022. The Sale Price Index, which measures the confidence of sellers via asking prices listed on PropertyGuru.com.my, continued to inch upwards by 0.14% YoY, despite a slight dip of 0.19% QoQ in Q4 2021.
Shylendra shared, “Following the liberalisation of movement controls and economic activity in Q4 2021, we saw an uptick in the overall property market activity in Malaysia. We believe that the market will remain cautiously optimistic about continued improvements in the general market environment as the year progresses, on the back of better economic conditions and higher vaccination rates.”
The Sale Supply Index, which provides a view of supply trends through the volume of newly launched and resale property listings on PropertyGuru.com.my, reflects some of this confidence. In Q4 2021, supply moved up by 13.54% QoQ, following negative growth in the previous quarter. Supply also grew by 22% YoY, compared with 5.3% YoY growth in the preceding quarter.
New Challenges Ahead for the Property Market
The recovery of the property market will continue to be closely linked with the overall health of the national economy, and it will also face new complexities in terms of consumer confidence with the altered social and commercial landscape driven by COVID-19. Among the challenges faced by the property market is the lack of incentives for buyers since the government-initiated Home Ownership Campaign (HOC) ended on 31 December 2021.
Shylendra said, “With little direct incentives for the property market in Budget 2022 and the expiry of the HOC just as the market begins to find its footing, there is no doubt that buyer confidence may be impacted, and further pressure will be placed on financial indicators in the near term. As such, expectations of a quick property market rebound this year have now been moderated. Instead, we can expect improvements to occur at a gradual, steady, and measured pace. In the meantime, the rental market will grow as demand increases among those who opt to put off purchasing plans during this period of economic uncertainty.”
He added, “At PropertyGuru, we hope to see Malaysians resume their goals of homeownership in line with the recovery of the nation. Those who have the financial means, especially, should take advantage of this period of low interest rates and suppressed pricing opportunities, so as to benefit from capital appreciation for their investment in the future.”
To empower Malaysians in making confident property decisions with data-driven insights, PropertyGuru DataSense has evolved the MPMR – formerly known as the Malaysia Property Market Index (MPMI) – with the inclusion of additional data to best capture the mood and trends of the market with a new, clear, and concise methodology. The refreshed report is based on three main indices; the Price Index, Supply Index as well as a newly introduced Demand Index that covers both the sale and rental markets.
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