Residential property market expected to remain stable
Dips in Q1 demand and supply are due to seasonal factors: PropertyGuru Malaysia report
PropertyGuru Malaysia’s latest property market report (MPMR) for Q1’24 has indicated a minor 1.1% QoQ drop in the sale demand index and a 4.4% decline in the sale supply index.
This is mainly attributed to seasonal factors such as the Chinese New Year celebrations. Similar declines were observed in Q1’23 (-5.5%) and Q1’22 (-2.3%) respectively. On the housing price front, however, the sale price index recorded a mild 1.4% QoQ increase.
Country manager Kenneth Soh said, “The figures from our report indicate a decline in demand due to seasonal trends. However, infrastructure developments are seen to positively influence the property market dynamics in specific submarkets.”
For instance, he said Johor’s residential properties saw a 2% increase in its sale demand index.
“The uptick in property enquiries is attributed to the upcoming Rapid Transit System project, which serves as a catalyst in bolstering property demand in the surrounding areas,” said Soh.
Looking ahead, he added such developments will continue to play a pivotal role in shaping property demand by influencing development opportunities and job accessibility in the immediate area.
Therefore, he remarked that it is essential to factor in these influences when analysing market trends and making investment decisions.
Despite seasonal dips in residential demand and supply, the market is expected to maintain its stability. The MPMR indicates a slight 1.1% QoQ decline in Q1’24’s sale demand index and a 4.4% drop in the sale supply index, reflecting seasonal adjustments rather than economic issues. Amid the ongoing uncertainties, including heightened geopolitical tensions and economic downturns, property seekers have adjusted their housing expectations accordingly.
This indicates that the market is wellpositioned for stability, maintaining its capacity to operate effectively and contribute to a healthier property market, provided that no major unforeseen shocks occur.
Similar to the sale market, the rental demand index for residential properties recorded a decline of 11% QoQ. This was partly due to seasonal festivities which typically affect rental activity at the start of the year. This seasonal influence was evident in Q1’23 as well, when the rental demand index declined by 6.2%. However, the decrease in rental demand in Q1’24 may also be influenced by challenges such as rising asking rents and an increase in property supply.
The rental supply index in Q1’24 witnessed a significant YoY growth of 31.3%, despite experiencing a 1.8% decrease from Q4’23. Similarly, asking rents went up by 2.2% QoQ, marking a 12.4% jump from Q1’23.
This unexpected trend is attributed to various factors including improved property conditions, increased demand in certain areas, or changes in the local real estate market.
“While these demand and supply figures suggest a period of adjustment, the market’s resilience and the nature of these shifts provide a cautiously hopeful outlook. The balance between supply and demand is evolving, and with careful navigation, the rental market could maintain its stability. This would continue to attract property investment from buyers looking to enjoy good rental yields, especially in areas showing faster economic growth and those with infrastructure developments in the pipeline,” Soh said.