Slower GDP growth to hamper property market
KUALA LUMPUR: The slowdown in Malaysia’s gross domestic product (GDP) will likely hamper growth within the local property sector.
According to PropertyGuru Malaysia country manager Sheldon Fernandez, the GDP slowdown to 4.3 per cent is well below earlier estimates of 4.8 per cent, and more recent projections of 4.5 per cent.
“This is in line with our neutral outlook for property this year, with strong macroeconomic headwinds.
“Slower economic growth translates to reduced accumulation of wealth, which is a prerequisite for home ownership.
“As such, we anticipate further impacts to home seeker sentiment, though this may be buffered to some extent by Bank Negara Malaysia’s (BNM’s) timely Overnight Policy Rate (OPR) revision.”
It should be noted that GDP expansion does not directly correlate to growth in the property market, with the la er influenced by other factors such as urbanisation, construction and demographical trends, typically following a cyclical pa ern.
“However, the truism that a rising tide li s all boats – as well as its inverse – applies,” Fernandez added.
“Finally, while the recent global outbreak of the novel 2019nCoV coronavirus strain has impacted supply and markets elsewhere, we see no direct impact on Malaysian property to date, though increased interest in domestic properties from international purchasers is possible in coming quarters, particularly in Penang.”