Higher Asking Prices For Malaysia Real Estate Despite Covid-19
Malaysia’s real estate asking price still high; a good sign for Covid-19 post-pandemic recovery
Despite the threat of COVID-19, the asking price for residential properties in major cities in Malaysia continued to rise since 4th quarter last year to the first quarter of 2020, PropertyGuru Malaysia cited on its latest Property Market Index report.
Malaysia’s leading real estate developer and service provider confirmed on its report a 0.63 asking price increase on real properties mostly located in Kuala Lumpur and Selangor.
According to PropertyGuru Malaysia’s country manager Sheldon Fernandez, the skyrocketing of the asking prices of residential real properties in major cities like Kula Lumpur and Selangor amplifies the people’s high interest to find a safer and more strategic place to settle in preparation for the post-pandemic recovery.
The latest report of PropertyGuru Malaysia is backed by Juwai IQI projection’s citing that the residential property asking price in Malaysia will continue to shoot high up until 2021. The real estate sales and media company reported that Malaysia would curve at least 1.1 percent increase of residential property price as people traverse to the post-recovery state.
According to Kashif Ansari, Juwai IQI executive director, once the Movement Control Order (MCO) is lifted, the number of people who want to engage in the real estate industry will again become overwhelming. But for now that the world is still at the height of the pandemic, he admits that the stagnant real estate activities are from over.
Meanwhile, also included in the PropertyGuru’s report is the data pointing out that the country’s real estate’s incoming supply, or those real estate projects that are still at the pipeline, have dropped by 10.47- the worst in the past three years. According to PropertyGuru, the drastic fall of incoming supply is due to the government’s strict MCO that aims to stop the spread of the dreadful COVID-19 pandemic. But if things will normalize in the coming months, Juwai IQI is expecting an 8.6 percent increase to the residential property prices located in Malaysia’s key cities.
Fernandez said that the major setback on the incoming supply is a direct impact of the strict community restrictions and border controls which crippled the economic activities, not only in Malaysia but in the entire world. He exclaimed that the COVID-19 pandemic affected all sectors across the board, but since Malaysia is one of the real estate hubs of the world, its real estate sector is one of the badly hit.
In retrospect, since January, the PropertyGuru recorded a major blow on the commencing of new real estate ventures and the transactions for the underway real property projects were also put into a halt.
But despite the fact that the incoming supply is getting out of composure, Fernandez said that real estate business is still a good catch in Malaysia. He further added that because a lot of people are now considering to transfer to a more stable and strategic place to live and recover from the havoc caused by the pandemic, the asking price of real properties in the key cities will surely increase.
Fernandez clarified that the upswing of the asking price for all of the real properties in Malaysia’s major cities started last quarter of 2019, but since the said market status already gained a firm ground, the asking price keeps on surging even the height of the pandemic.
Asked on which city or state recorded the highest increase of asking price, Fernandez confirmed that Selangor took the lead. The highly urbanized state in the west coast of Malaysia got an impressive 1.94 percent increase of asking price after its recorded 91.43 index price in the fourth quarter of 2019 climbed to 93.20 in the first quarter of 2020. Meanwhile, Malaysia’s capital Kuala Lumpur landed as the second city to record a huge increase of real estate asking property with 1.81 percent growth, from 94. 90 recorded real estate price index in the last quarter of 2019 to 96.62 at the onset of this year.
“The upswing points towards a strong interest in the central region, which is in line with increased investor activity in high-rise projects closer to metropolitan areas during crisis years;” highlighted Fernandez as he explained how the pandemic somehow spike significant increase of real estate asking price.
Fernandez further informed that PropertyGuru Malaysia’s website generated an overwhelming increase in its web traffic right at the onset of the pandemic. He said that based on their site’s analytics, people who are searching for high-end condominiums and buildings near Selangor and Kuala Lumpur got to extreme count between March and April. Fernandez said that people who are looking for real properties amounting to RM900,000 to RM2 million recorded a significant increase in the first quarter of this year.
But unlike Selangor and Kuala Lumpur, some Malaysian states such as Penang and Johor are not so fortunate as these states are almost dropping all their available assets in their arsenal as the people in these areas are trying to survive the COVID-19 pandemic. Penang and Johor have price downtrends of 0.13 and 0.59 percent respectively. The said numbers translate to Penang’s 95.39 recorded index drop in the last quarter of last year to 95.27 in the first quarter of 2020. On the other hand, Johor got a huge 99.59 disadvantage, and it got worst to 99.00 in the same period.
On the other hand, the six- month long interest and principal payments moratorium imposed by Bank Negara Malaysia has gained strong support from the public, especially those coming from the real estate sector. A lot of property owners in the country extended their appreciations by posting commendations online to the Bank’s gesture to mitigate the impact of the pandemic.
According to experts, Malaysia’s real estate industry in all of its states will recover sooner than its neighbor countries. With the robust economy of the country and its strategic demographics, people will inevitably find a property to live and find great opportunities to counter the health and economic impacts of the pandemic. This positive projection agrees with the analysis of PropertyGuru. The firm believed that the marginal improvement of the asking price of real properties in Malaysia will continue and will serve as a significant springboard for the country’s successful battle against the COVID-19 pandemic.
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