1) Continued price decline for first half of next year, possible recovery in late 2019
2) Opportunities aplenty with several positive trends to emerge next year
3) Potential property hotspots in 2019 identified
Despite improving consumer sentiment and proactive government policies announced in the Budget 2019, PropertyGuru Malaysia foresees the property market downtrend to continue for at least the first half of 2019.
The downward trend is reflected in both quarterly and annual price movements despite improved consumer sentiment of 42 percent and 53 percent of Malaysians respectively, wishing to buy a home by the end of 2018.
The PropertyGuru Market Index showed that asking prices by real estate developers and individual owners nationwide had dipped by 2 percent from the preceding quarter in the third quarter of 2018 (“Q3 2018”). Year-on-year, prices show a 2.3 percent drop.
The regions Kuala Lumpur, Selangor, and Penang are also facing a downward asking price trend, with Johor’s asking prices beginning to take a major dip – it’s highest since Q4 2016. Rental Price Index trends however differ across the 4 regions, with Kuala Lumpur’s showing an almost flat line, Selangor’s taking a dip, and Penang, and Johor’s Rental Price Index showing an incline.
For further reading on the Asking and Rental Price Index, view this report at http://bit.do/PropertyGuruOutlook2019.
Given the larger macroeconomic fundamentals at play, coupled with rising home unaffordability, extensive supply in certain key segments and a serious lack of financial visibility among Malaysians, the market outlook for 2019 is for property prices to remain consistent with 2018 for the better part of the year.
The pent-up demand for homes remains strong and is expected to continue increasing in 2019, the growing desire to own a home may not necessarily translate into completed transactions and upward price movements due to the various market dampening factors.
WAIT & SEE APPROACH: GREATER INNOVATION SEEN FROM THE SUPPLY SIDE, DESPITE SLUGGISH MARKET
Given that budgets are tight and there is plenty of supply, many may choose to look around for the first six months before making a purchase decision later in the year.
Others may adopt a wait-and-see approach, hoping to benefit from the various home affordability schemes by the government and even the annual PropertyGuru GuruDeals during which Malaysians can get the steepest discount deals exclusively and only for a limited time.
“Expect the downward trend to persist in the first half, but there is a chance of a market recovery – post third or fourth quarter 2019. The initial optimism expressed post the 14th general elections (“GE14”) is beginning to wear off as buyers are adopting a more cautious approach,” shared PropertyGuru Malaysia Country Manager, Sheldon Fernandez.
Fernandez also mentioned that a continued but stable price downtrend is not necessarily a negative development as shown over the past 2-3 years. He added that present market conditions have compelled developers and private sellers to be more competitive in terms of quality, design ideas, ownership packages as well as pricing.
“It’s a healthy situation. There is plenty of supply for both purchase and rental for Malaysians to choose from and the sluggish conditions are also encouraging greater innovation and ideas to come to the fore, especially with regards to build and design, spatial use, technology and more.
“We still see many positives and we hope the prevailing issue of unaffordability and lack of financing can be overcome,” added Fernandez.
“In fact, we think that this is the best time for Malaysians to consider owning their own homes. At PropertyGuru, we take home ownership very seriously. Case in point, the PropertyGuru “Own Your Home” programme was recently launched to empower Malaysians to become homeowners.
“A key component is the PropertyGuru Mortgage Pre-Qualifier.
“It is the first and only product in Southeast Asia that enables Malaysians to find out for sure how much of a bank loan they will be approved for, accurate by 99.5%.
“This tremendously improves chances of securing a home loan as Malaysians would be able to make more confident property decisions,” Fernandez further added.
To read the full report on where the 2019 property trends are heading visit http://bit.do/PropertyGuruOutlook2019