Want to know which are the top three states in Malaysia with the most residential property transactions in 1H 2020? If your thoughts include KL and Penang, you have guessed incorrectly. The top three states with the highest number of residential property transactions are (in this order): Selangor, Johor and Perak. Yes, my home state is 3rd in ranking when it comes to people looking to buy and actually buying a property.
In fact just these three states added up together would already be 1% shy of 50% for the whole Malaysia! I mean 1H 2020 transactions lah. Please refer to the image below.
Which types are the most popular?
We know the states with the most residential property transactions. In terms of type, landed has beaten high-rise easily in 1H 2020. Just terrace homes alone is close to 3 times that of high-rise units. Close to 31,000 units of terraces homes were transacted within 1H 2020 versus just 11,045 units for high-rise. Actually, this tells us that when it comes to family needing a home, landed homes will still be very popular. During slow times, property investment may become secondary while looking for upgrade homes or even buying that family home becomes primary.
Recently, I have been sharing with many people about my experience with sales galleries in Rawang and the results have always been positive! Yes, I visited like 6 galleries just a few weeks back. Rawang is not even considered a major choice in terms of location for most buyers.
Demand vs Supply by Type
We know that the demand for landed homes are much greater than high-rise in 1H 2020. if we look at the existing supply of those types, we could see that terraced homes remain almost two times larger than high-rise. Please do not think that this is the case in big cities yeah. The fact remains that when it comes to properties in less developed states, landed properties remain the most popular choice. So much land, why buy high-rise?! This is why total supply of landed is higher than high-rise.
Now if we move a little further down the road, we will understand that with urbanisation, it meant that more Malaysians will be moving to bigger cities. These bigger cities however may not have the supply of cheap and affordable landed homes like their hometowns. Thus, when they come to the city to work, their choice would usually be high-rise units. This is why we could see that high-rise units under ‘future supply’ has already beaten that of landed terrace homes. Do refer to the image below for understanding.
Secondary vs Primary property market
Around 80% of all residential property transactions are because of secondary property market. This comes from the 5.78 million existing supply. This is the reason why I have been telling first-time home buyers that it does not always need to be new homes. There are lots of reasons for secondary properties too and it includes choices, attractive price and the important what you see is what you get.
Sometimes, buying new does not guarantee anything which you saw in the sales gallery, okay? Yes, I have personally bought from both the primary market and the secondary and I feel both have their benefits and advantages too. Just need to pick the one most suited to our preference. Happy viewing.
Love to be updated of investment news? Sign up for KopiWeekly. (once per week for property, finance, investment news and more)
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: Official: Malaysia property market transactions for H1 2020
