Malaysia’s property market on the mend before Covid-19 second wave jitters
KUALA LUMPUR: Property price impacts of the Coronavirus Disease 2019 (Covid-19) pandemic in Malaysia have been minimal to date, indicating that the nation’s real estate market may recover faster than expected, according to PropertyGuru.
This was seen in the PropertyGuru Malaysia Property Market Index, which saw a 0.38 per cent quarter-onquarter gain in asking prices in 2Q20, and supported by recent Valuation and Property Services Department (JPPH) data, which cited a marginal increase of 0.40 per cent in the Malaysian House Price Index (MHPI) over the same period.
Other trends that point towards brighter prospects for domestic property include a resurgence of interest in central areas, with Bukit Jalil, Damansara and Kepong as prime hotspots, as well as strong month-on-month growth in online searches for affordable and midrange properties.
However, these growth prospects may be derailed in the face of a potential second wave of Covid-19 clusters nationwide following the emergence of hotspots in Sabah and subsequent spread to other states.
“The National Property Information Centre’s 1H20 data quantifies the impact of Covid-19 on the market, with a 27.9 per cent drop in transaction volume and 31.5 per cent drop in value. This compares to 32.3 per cent and 47.6 per cent declines respectively during the 1998 recession and Nipah virus outbreak, in line with our projections of those figures as the worst-case scenario postpandemic,” said PropertyGuru Malaysia country manager Sheldon Fernandez, in a press statement.
“JPPH MHPI data also supports PropertyGuru Malaysia Property Market Index findings, which saw marginal q-o-q drops in asking prices of 3.10 per cent, 2.52 per cent, 1.76 per cent and 0.97 per cent respectively in Johor, Kuala Lumpur, Penang and Selangor in 2Q20. Notably, transaction volume and value have rebounded since the initial impact of Covid-19, showcasing Vshaped recovery curves, though transactions have yet to reach pre-pandemic levels.”
PropertyGuru Malaysia noted that this recovery was reflected in renewed home seeker interest among Malaysians following the initial MCO, with a significant increase in searches for properties in the RM501,000 to RM700,000 (56 per cent rise month-on-month), RM301,000 to RM500,000 (39.6 per cent rise mo-m) and RM151,000–RM300,000 (31.5 per cent rise m-o-m) ranges in August.
In addition, demand in urban areas and established hotspots, which saw a decline in the early stages of the Covid-19 pandemic as property seekers and work-from-home trends emphasised decentralisation, has revitalised. Selangor, Kuala Lumpur and Johor showed the most improvement, with monthon-month increases in property searches of 45.7, 33.7 and 22.4 per cent respectively.