Please do not believe anyone who tells you that the Malaysian property market is going to spring back to action as soon as Movement Control Order is over. Well, at least until things normalise or we have some very targeted measures for the property market. For example, another round of Home Ownership Campaign (HOC) which was proven to have helped the property market tremendously. It is expected that 2019 would see transaction numbers be higher than 2018. Anyway, we wait for the official numbers.
There is however one market which has shown that demand is still robust. In other words, it demonstrated the fact that the current COVID-19 pandemic is a health crisis which has affected the economy but it was never a financial crisis right from the start. For people who has their jobs before COVID-19 and after COVID-19, they will still need to continue purchasing a home which they had wanted buy before the pandemic started. If you need it for a growing family, you will still need to buy it for the growing family…
Article in SCMP.com China’s housing market springs back to life as sales in 30 major cities triple with their recovery from the effects from coronavirus. Property sales in 30 tier-1 and tier-2 cities triple in March from February. However, analysts say that these pockets of sizzling sales numbers will not be able to counter the expected decline in the whole of China for 2020. Some of the large cities with positive transactions which are higher than average levels in Q4 2019 include Shenzhen, Chengdu, Fuzhou, Hangzhou, Huaian, Yangzhou, Jiaxing, Shantou.
Yang Hongxu, deputy head of E-house China Research and Development Institute said, “Prices of some new projects were capped [by the government], lower than the market price, so some projects are popular.” He added, “Restrictions on housing and land prices also created some room for arbitrage, so people are rushing to buy houses and property developers scramble to buy land.” There are a lot more details in the article. Please do read the full article here: Article in SCMP.com
Okay, before we get too carried away, let’s come back to present. China has faced the full brunt of COVID-19 effects and they are now starting to normalise. Pent-up demand would have also helped these numbers. What’s more important to note is how will it pan out till the end of the year. As the analyst has said, this current spring in numbers will not enough to counter the decline of transactions for 2020.
On the other hand, we should also not be too worried too. China has demonstrated that if we do the right things and start to regain control from COVID-19, then there are good news for the property market. Demand will continue when people still need a home and looking at the urbanisation as well as the GDP growth numbers, this demand will continue to happen too. Yes, for Malaysia, we still have a growing population too and our median age is just 30 years. Lots of ‘roar’ left. For now, let’s just hope the peak is achieved soon and we could go to China’s level soon… No speculation on the date. Wait for formal announcement. Cheers.
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Next suggested article: Lower GDP forecast. Oh dear