A recent survey by PropertyGuru, the region’s leading property portal showed that consumer sentiment towards property has improved marginally despite the overall sluggishness of the local real estate sector.
Findings from PropertyGuru’s latest Consumer Sentiment Survey for the second half (2H) of 2015 showed that 28% of Malaysians expressed satisfaction with the local property market; an increase of 3% compared to the first half of 2015 (1H2015). The number of people who feel properties are getting expensive has also decreased slightly to 48% from 55% in Q1 2015.
Of note, 56% of consumers have expressed intention to buy a residential property within the next six months. However, while intention has grown, many they still express frustration with unaffordable pricing and the inability to obtain adequate financing.
The results are consistent with PropertyGuru’s Malaysia Property Outlook Report for 2016 & PropertyGuru 2016 Outlook Forum held in December last year; all of which point to a buyers’ market scenario and that consumers are likely to capitalise on the current market conditions to buy homes.
Factors behind Increasing Positive Sentiment
The oversupply of various property, especially high-rise or strata residences has resulted in favourable conditions for property buyers i.e. a slowdown in price increment which has rekindled market interest. The various measures introduced by the government have also had an effect on the market.
“The unaffordability issue remains, but prices have somewhat moderated and due to this, more people have started to look at properties again. In addition, property developers have also upped the ante by offering more value to push their units. Hence, buyers are expressing positivity as they realise that the current scenario of moderating prices and exciting offers is quite attractive and may not come again in the near future,” stated PropertyGuru Malaysia Country Manager, Sheldon Fernandez.
Fernandez cautioned though that consumer sentiment is still low and it may take another six months to a year to see a major recovery. However, it is likely that consumers are accepting the realities of owning a home in Malaysia, especially those in the middle income - mass market segment.
“I think people are becoming more acceptable to living further from the city for lower house pricing or even to accept smaller homes in the city. As consumers change their perceptions, they are also starting to look at properties again with more realistic expectations,” he added.
High-Rise Homes Still Ranked Top Choice
PropertyGuru’s Customer Sentiment Survey also showed that high-rise homes – both condominiums and apartments are the most popular homes, followed by terrace homes. The top considerations when purchasing property in descending order are location followed by price per sqft, future developments in the area, property size, the developer’s reputation and lastly rental yield.
Overseas Property Investment Remains High
Malaysians still look to buy property outside of Malaysia. 51% cited affordability and 30% for capital appreciation as reasons to purchase overseas. 29% did so for their children’s future education. Of those planning to purchase a property overseas, their top choice of property purchase are private residential, high rises at 23%, far higher than land at 14% and landed residential properties at 12%.
The undisputed country of choice for overseas property purchase is Australia at 52% followed by Singapore (23%), Indonesia (15%) and the United Kingdom (14%). In 1H 2015, Australia was the top choice at 40% of respondents, Singapore 23% and the UK 19%. Australia’s appeal has grown stronger probably due to the favourable currency exchange rate, which had not seen much appreciation to the Malaysia Ringgit unlike the Singapore or British currencies.
PropertyGuru’s Consumer sentiment survey is an on-going insight effort to feel the current market pulse and the sentiment of consumers with regard to the domestic property market. It is the only independent local survey to do so with similar exercises carried out concurrently in Singapore, Thailand and Indonesia.
The Property Sentiment Survey was conducted by PropertyGuru in collaboration with Added Value-Saffron Hill, a Singapore-based independent professional research agency to strengthen the rigour and credibility of research findings.
The aim of the Property Sentiment Survey is to help consumers and property agents gain an insight into the local property market to make better business and buying decisions.
Download the full report of Malaysia Property Market Sentiment Survey Report 2016 or visit www.facebook.com/propertyguru.my.