The ongoing oversupply of residential properties in Malaysia is seeing projects in the primary market losing their lustre, according to the PropertyGuru Consumer Sentiment Survey H1 2019.

While more than half of respondents shared that they intend to purchase a property in the next six months, the report highlighted a year-on-year drop in exclusive interest in the primary market from 53% in H1 2018 to just 37% in the first half of this year.

This was accompanied by a rise in overall interest in subsale properties from 47% to 62% of respondents over the same timeframe. This figure includes purchasers interested in both secondary and primary market properties, which comprised 48% of respondents in H1 2019.

Source: PropertyGuru Consumer Sentiment Survey H1 2019

Changing consumer preferences

“Malaysians are becoming more flexible in terms of the kind of properties they are looking for. Just a year ago, new launches were the clear favourite, accounting for the majority of interest, with just 14% of home seekers willing to consider the secondary market as well,” said Sheldon Fernandez, Country Manager, PropertyGuru Malaysia.

“Today, 48% of Malaysians are looking for both new and subsale properties, with 14% exclusively targeting properties in the secondary market. This may underscore the growing disparity between new project launches and actual demand, whether in terms of pricing, location or other considerations.”

Source: PropertyGuru Consumer Sentiment Survey H1 2019

The introduction of the national Home Ownership Campaign (HOC) earlier this year – and its extension to 31 December – is not seen as a direct contributing factor, as its incentives and exemptions are designed to ease the country’s residential overhang in the primary market.

As such, there have been calls by industry watchdogs such as the Malaysian Institute of Estate Agents (MIEA) for the extension of the HOC to subsale properties. According to National Property Information Centre (Napic) data, the secondary market accounts for 80% of all property transactions in the country.

“This shift in preferences for subsale properties predates the HOC, with exclusive interest in the primary market among PropertyGuru Consumer Sentiment Survey respondents falling to 39% in H2 2018,” said Fernandez.

“It’s possible that location is the driving factor behind these changes, with purchasers prioritising older projects in central, more mature townships. Another factor which may play a role is immediacy, as subsale properties are available for home seekers to move into right away.”

Silver linings for demand

While consumer preferences may have shifted from the primary to the secondary market, purchasing patterns remain steady, with established suburbs and satellite townships surrounding city centres continuing to account for the majority of demand. 

“We look into two areas of interest: current residence and intention to purchase. In both respects, Klang Valley and its associated neighbourhoods ranked at the top of the list for Consumer Sentiment Survey respondents,” said Fernandez.

In terms of current residence, most (52%) respondents are located in Klang Valley. Of these, 12% reside in Petaling Jaya, with Shah Alam and Subang Jaya (both 10%), the Kuala Lumpur city centre (8%), Cheras and Puchong (both 7%), Ampang (6%) and Damansara (5%) popular among respondents as well.

These patterns are reflected in purchasing intentions, with 62% of respondents targeting properties in Klang Valley. These respondents placed the following areas and townships highest in terms of buying interest:

1. Petaling Jaya
2. Subang Jaya
3. Damansara
4. Shah Alam
5. Cheras
6. Kuala Lumpur City Centre
7. Puchong
8. Bangsar
9. Ampang
10. Mont Kiara

In addition, the Consumer Sentiment Survey H1 2019 findings highlighted the differences in purchasing behaviours between younger and older home seekers.

Source: PropertyGuru Consumer Sentiment Survey H1 2019

For the age group from 22 years to 39 years old, financial eligibility and price per square foot were core factors in decision-making, as reported by approximately 23% and 37% of respondents in the demographic respectively. 

However, for those from 40 to 69 years old, security and safety were the key concerns, as cited by approximately 42% of respondents in the group. Location was a primary consideration across the board, with about 82% of respondents in both demographics reporting it as a priority.

Locational preferences varied markedly by age as well. Younger purchasers desired homes close to their workplaces and families, while older home seekers looked for projects near public transport, shopping centres and dining outlets.

Source: PropertyGuru Consumer Sentiment Survey H1 2019

“Savvy developers are offering home seekers more options when it comes to the types of units available, as well as their features. We’ve seen a lot more granularity there as industry players cater for different segments of the market, and of course unit sizes have been shrinking to lower barriers to entry for younger purchasers,” said Fernandez.

“In terms of financial eligibility, numerous home ownership initiatives have been launched to assist home buyers in overcoming these hurdles. These include our very own PropertyGuru Home Loan Pre-Approval, which allows users to know their home loan eligibility ahead of time, avoiding the pitfalls of loan rejection.”

Market sentiment on the mend 

Looking at broader market direction, the recent PropertyGuru survey found that sentiment had improved year-on-year, with the Property Sentiment Index rising from 39 in H1 2018 to 44 in H1 2019. 

Source: PropertyGuru Consumer Sentiment Survey H1 2019

“We attribute the increase in performance to incremental improvements in terms of sentiments on affordability, as well as outlook on the current real estate climate. In particular, more home seekers are considering purchasing domestic properties, following a downturn since the latter half of 2017,” said Fernandez.

Source: PropertyGuru Consumer Sentiment Survey H1 2019

The percentage of respondents interested in buying locally declined from 57% in H2 2017 to 48% in H2 2018, with a possible correlation to the uncertainty surrounding Malaysia’s 14th general election in May that year. It has since returned to pre-election levels of 54%. 

Source: PropertyGuru Consumer Sentiment Survey H1 2019

In addition, overall positive perceptions of the real estate climate in the country have steadily risen in the past few years, from a low of 25% in H1 2015 to 43% in H2 2018. This year, satisfaction declined marginally to 41%, though the long-term trendline is still on the upswing. 

Source: PropertyGuru Consumer Sentiment Survey H1 2019

“As a whole, with the introduction of initiatives such as the HOC, which has already been extended to 31 December this year with proposals to broaden its purview to next year, as well as to the secondary market and even international purchasers, sentiment is on the mend,” said Fernandez.

“However, danger points such as pricing and financing should be addressed for the market to achieve sustainability in the long term, rather than relying on interventions such as the HOC.”

The PropertyGuru Consumer Sentiment Survey H1 2019 was based on a sample group of 958 respondents, responding to online questionnaires. Conducted since 2009 and implemented in collaboration with international research agency Intuit Research Consultants, the survey’s respondents primarily comprised professionals, managers, executives and businessmen (47%) in the mid to high-income segment (86%).

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The home-share economy, as exemplified by Airbnb, HomeAway and similar solutions in Malaysia, has come under increasing scrutiny by industry players, users and authorities alike amid wider oversupply concerns in the residential rental market.

The country comprised Airbnb’s fastest-growing market in Southeast Asia last year, welcoming more than two million guests through over 44,000 listings. However, the rapid growth of such solutions has drawn concern from some quarters, with 54% of PropertyGuru Consumer Sentiment Survey H2 2018 respondents calling for regulations to be put in place to manage the industry.

Figures given are in % (Source: PropertyGuru Consumer Sentiment Survey H2 2018)

Checks and Balances for Home-Sharing

“This isn’t to say that Malaysians are against home-sharing, as the survey found that many (49%) agree with such solutions, while 57% are personally interested in exploring home-sharing solutions themselves,” said Sheldon Fernandez, Country Manager, PropertyGuru Malaysia.

“However, as with many emerging or disruptive technologies and businesses, there is room to improve in terms of regulation. This was acknowledged by research commissioned by a prominent home-sharing player earlier this year, which highlighted the need for home-sharing guidelines, whether they are at the national, state, community or building level.”

Recent efforts in February include calls for home-sharing operators to register with the Tourism, Arts and Culture Ministry. In addition, the Malaysia Productivity Corporation is outlining a framework to manage short-term accommodations in the country.

However, the lack of national guidelines has seen the proliferation of differing approaches to home-sharing depending on area. This has led to the current calls for regulation, while hospitality associations link the practice to declining hotel occupancy rates amid wider challenges in the residential rental segment.

Tenants’ Market for Residential Rentals

The PropertyGuru Consumer Sentiment Survey H2 2018 underscored prevailing attitudes among Malaysians towards renting, with nine out of 10 preferring to buy their own homes and nearly seven out of 10 (68%) currently staying in their own properties.

“These attitudes likely reflect traditional views on property as symbols of status, as well as investments. However, this may change as ‘Generation Rent’ – younger demographics such as millennials and later cohorts – finds properties priced increasingly out of their reach,” said Sheldon.

An oversupply of high-rise residential projects nationwide has seen tenants spoilt for choice for rental accommodations, exerting downward pressure on rental rates. In some areas, such as Johor, much of this incoming supply was designed with home-sharing applications in mind.

In Kuala Lumpur alone, owners adjusted asking rentals downwards by as much as 10% in 2018. This was also driven by obsolescence, as older projects competed with newer launches.

Among survey respondents looking to rent, 60% of these shared that their rental budget was RM1,100 or less. Rental rates from RM800 to RM1,100 were the “sweet spot,” with 19% of respondents saying they were seeking rentals in this range.

Figures given are in % (Source: PropertyGuru Consumer Sentiment Survey H2 2018)

The majority (82%) were in the market for a whole unit to accommodate their families, with just 18% seeking smaller arrangements such as a room. Condominiums and serviced apartments were the preferred residential rental property type (63%), followed by terrace houses (23%), SoHo units (7%), townhouses (3%) and bungalows (3%).

Generation Rent – The Facts About Families 

“While many may prefer buying to renting, younger Malaysians may have no choice but to resort to long-term rental accommodations in the face of financing and property pricing concerns,” said Fernandez.

“The good news is that the long-standing perception of millennials as dependent on their families for living arrangements is outdated, with only 23% of the demographic surveyed currently staying with their parents.” 

Millennials were less hopeful about owning property than older demographics, with only about half (51%) of those planning to move out of family homes in the next year, sharing that they were planning to purchase a property within six months.

In addition, the PropertyGuru Consumer Sentiment Survey H2 2018 found that more Malaysians are deferring moving out to later in life. Of those who are still living with their parents, 87% shared that they planned to move out by the time they were 28 years old or older, with 34% citing 35 years or more as the appropriate age to make the leap.

Source: PropertyGuru Consumer Sentiment Survey H2 2018

“In practice, though, our research found that most Malaysians (89%) who move out will have done so by the age of 30. With this in mind, ‘property procrastination’ may hurt the chances of Malaysians ever owning their own property at all,” said Fernandez.

“This likely reflects the long-term planning and financial commitment needed to invest in property assets, making them unsuitable for the unprepared. As such, PropertyGuru has introduced initiatives such as our Home Loan Pre-Approval solution, to assist Malaysians in this and other aspects of home ownership.”

Marriage was seen as the primary consideration for millennials who chose to continue staying with family, with 58% reporting they were delaying moving out until they tied the knot. Other factors included the need to take care of parents (55%) and lack of savings (52%).

Source: PropertyGuru Consumer Sentiment Survey H2 2018

Evolving with the Industry 

In addressing the needs of Malaysians keen to own property but faced with financing challenges and other issues, PropertyGuru has continuously refined the Home Loan Pre-Approval following its launch earlier this year, leveraging on its role as Southeast Asia’s largest property technology company.

A fintech solution developed in partnership with domestic financial institutions, Home Loan Pre-Approval allows home seekers to know their home loan eligibility amount with 99% accuracy prior to application.

This allows home seekers to avoid the financial black marks associated with loan rejections, while matching them with more than 450,000 listings on the PropertyGuru marketplace along with preferential rates and services from panel banks. 

The solution has seen more than 1,000 completions to date. The vast majority (94%) of these are from home seekers with debt-service ratios of less than 70%, indicating healthy borrowing habits on the part of end-users.

Moving forward, the group is exploring the expansion of panel bank partners for the solution, among other areas. Home Loan Pre-Approval has already received accolades from industry authorities in both the property and fintech segments.

“I think that initiatives such as Home Loan Pre-Approval underscore the positive impact fintech can have in ‘real-world’ terms. There is a certain tendency to relegate fintech to certain circles or specialist interests, due to its sometimes technical nature,” said FIRST (Fourth Industrial Revolution Structural Transformation) President Aaron Ting.

“However, when it’s changing the way people live and work on a day-to-day basis, or even the way they buy their homes, then that’s something people can relate to. For FIRST, our priority is making sure that usage of fintech and blockchain applications goes hand-in-hand with a clear awareness and understanding of what they entail.”

The PropertyGuru Consumer Sentiment Survey H2 2018 was based on a sample group of 944 participants, responding to online questionnaires. The majority (42%) of respondents comprised those in the 30–39 year age bracket, with those between 21–29 years and 40–49 years making up 23% and 21% of the sample population respectively. Most respondents were from middle-income backgrounds (50%), with 31% in the high-income demographic.

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63% of Malaysians think the government could do more to make housing affordable. Discover these key stats and more in our PropertyGuru Sentiment Survey H2 2018 findings below.

While Malaysians are satisfied overall with government approaches to bring affordable property to the people, the majority still feel that a more targeted approach could be taken to address this pressing gap in the property market, according to the PropertyGuru Consumer Sentiment Survey H2 2018.

The sentiment comes amid widespread perceptions that property prices remain high in the country, with unfavourable market timing, and lack of capital and good financial options also cited as challenges by property seekers.

Figures given are in % (Source: PropertyGuru Consumer Sentiment Survey H2 2018)

Satisfaction with Public Sector Initiatives on the Rise

“In 1Q 2013, 93% of participants in the PropertyGuru Consumer Sentiment Survey expressed dissatisfaction with housing initiatives available at the time.

“This has decreased to 63% in the recent H2 2018 survey, with satisfaction rising from 7% to 22% over a similar timeframe.

Figures given are in % (Source: PropertyGuru Consumer Sentiment Survey H2 2018)

“These movements reflect increasing confidence in public sector initiatives over the past few years, with Malaysians wanting the government to up the ante in their initiatives to provide more affordable national housing for the masses,” said Sheldon Fernandez, Country Manager, PropertyGuru Malaysia.

Low Uptake of Existing Affordable Housing Programmes

According to the survey, actual uptake of national affordable housing programmes is low, despite demand for such initiatives. Only 19% of survey participants applied for the 1Malaysia People’s Housing (PR1MA) scheme, for example.

Participation rates ranged from 4%–9% for other initiatives such as Rumah Selangorku, the Federal Territories Affordable Housing Project, My First Home Scheme, 1Malaysia Civil Servants Housing and MyHome.

In fact, 41% of respondents reflected that they were not qualified to apply for such national housing initiatives.

“A large segment of home seekers is either not qualified, or unaware about existing affordable housing initiatives. That has deterred them from applying for or even considering these options.

“Another challenge is the lack of consensus on what exactly constitutes affordable housing itself. Baseline prices vary from location to location.

“That being said, the majority (nearly eight out of 10) of respondents considered properties in the RM300,000 to RM500,000 range to be on the affordable spectrum,” added Fernandez.

Financing Challenges for Young Malaysians

At the heart of the affordability debate are property prices which have rocketed skywards in recent years, with 76% of Malaysians anticipating continued price increases in the next six months, indicating prevailing negative price sentiment in the market.

Regardless of price movements, household income in Malaysia has failed to rise commensurate with costs. This has caused many to cite unfavourable timing and market conditions as a factor in their property decisions.

“Our survey found that more than half (51%) of respondents had resorted to withdrawing their Employees Provident Fund savings at least once to purchase properties.

“67% of Malaysians have a budget of RM500,000 or less for property purchases,” mentioned Fernandez.

This is supported by recent Bank Negara Malaysia reports, which found that 61% of loans approved in 2018 were undertaken for properties below RM500,000. In total, banks distributed RM133 billion in home financing to some 350,000 borrowers during that year.

Given income stagnation in the country, the younger generation has been particularly hard hit by property financing issues. More than 70% of home seekers under 29 years of age, for example, see prevailing interest rates in Malaysia as excessively high.

Further challenges for home buyers seeking financing include unfamiliarity with the paperwork involved, unfavourable credit histories, unstable sources of income and other outstanding debts that contribute towards high debt-service ratios in the country, such as car loans, personal loans and outstanding credit card debts.

Figures given are in % (Source: PropertyGuru Consumer Sentiment Survey H2 2018)

Primary Markets as a Silver Lining of Growth

“Looking at the bigger picture in terms of market appetite, we continue to see Johor, Penang, Kuala Lumpur and Selangor as primary contributors to transactions in 2018, with 75% of loans approved undertaken for properties in these areas,” commented Fernandez.

Asking prices generally trended downwards or sideways in Q1 2019, as the market adjusts to larger economic tides. However, the Johor, Penang and Kuala Lumpur markets registered marginal quarter-on-quarter increases of up to 0.5%, in line with their role as key focuses of national development.
Location-wise, the PropertyGuru Market Index Q1 2019 report found areas of high demand for affordable properties in Klang and Shah Alam. This demand is catalysed by the upcoming Light Rail Transit (LRT) Line 3 alignment linking these areas to the city centre.

In addition, the emergence of townships such as Bandar Rimbayu, Eco Sanctuary, Tropicana Aman and Setia Eco Hills sustains increasing demand for landed properties in Selangor. These hotspots also point towards fresh avenues for developers and authorities to explore in terms of affordable housing initiatives.

In terms of property types, more Malaysians cited interest in landed, semi-detached and mixed-use projects, with home seekers expressing fewer intentions to buy terrace, condominium, flat/apartment and bungalow properties.

Positive Sentiments Moving Forward

“With recent economic trends and a new government, we are also seeing positive developments and a stable employment market.

“Nevertheless, home ownership is still a far cry for many as there is still a demand-and-supply mismatch. This is reflected by the overall trendline decline of the PropertyGuru Market Index,” said Fernandez.

Source: PropertyGuru Analytics

In the first quarter of the year, the PropertyGuru Market Index was reported at 85.4, down from 85.6 in Q4 2018. This indicates dampened sentiment on the part of sellers, with asking prices moving downward in the mid term and sideways in the short term.

Government initiatives such as the Home Ownership Campaign are expected to stimulate buying appetite in the short to mid-term. This is seen in the increase in the Property Sentiment Index to 44 in H2 2018 from 39 in H1 2018, as well as the increase in asking prices for Kuala Lumpur in the same time period.

About the Reports

The PropertyGuru Consumer Sentiment Survey H2 2018 was based on a sample group of 944 participants, responding to online questionnaires. The majority of respondents comprised 30 to 39 year olds from the PMEB (professionals, managers, executives and businessmen) working demographic and medium to high-income households in Klang Valley.

The Property Sentiment Index is a benchmark of overall satisfaction with the real estate climate in Malaysia, based on consumer perceptions of market conditions, external realities and long-term potential growth. Finally, the PropertyGuru Market Index is an aggregate of seller sentiment based on 450,000 property listings on PropertyGuru.com.my.

After a 3-year steady but gradual decline in property prices, will 2019 see the property sector bottoming out – sparking hopes for a long-awaited recovery which market players are hoping for?

Despite improving consumer sentiment and proactive government policies announced in the Budget 2019, 2019 is likely to see a continued price downtrend for at least the first half of the year. With the inflation stabilising and various affordable housing schemes coming into play, first time home buyers may soon be able to afford a property.

Between October 2017 and October 2018, the Malaysia Consumer Price Index (CPI) increased by 0.6%. As compared to the increment in CPI of 4.3% between September 2016 and September 2017, the comparatively slight change between 2017 and 2018 is further indication that inflation is indeed stabilising.

Another indicative factor of an improving economy is the low unemployment rate of 3.3% in Sept 2018, which shows a decline of 0.1% as compared to Sept 2017 (3.4%).

PropertyGuru Market Index 2018

The PropertyGuru Market Index (an analysis of over 250,000 property listings aggregated and indexed) shows that asking prices of homes in Malaysia continue to drop nationwide as well as the key property epicentres of Kuala Lumpur, Selangor, Johor and Penang, signifying a price correction.

The downward trend of asking prices is reflected in both quarterly and annual price movements despite improved consumer sentiment of 42% and 53% of Malaysians respectively, wishing to buy a home by the end of 2018.

In the third quarter of 2018, the PropertyGuru Market Index showed that asking prices by real estate developers, property agents and individual owners nationwide had dipped by 2% from the preceding quarter. Year-on-year, prices show a 2.3% drop.

Kuala Lumpur

The Kuala Lumpur trend line shows slow but steady downward movement, with asking prices declining by 1.4% year-on-year, from Q3 2017 to Q3 2018. As compared to Selangor and Penang, the comparatively slower decline in Kuala Lumpur is an indication that property prices within the city centre are close to bottoming out.

According to the PropertyGuru Rental Price Index, the rental prices for residential properties in Kuala Lumpur is also on a declining trend, with a reduction of 2.2% between Q2 2018 and Q3 2018.

While there has been a dip in asking prices, the demand for property in Kuala Lumpur is still strong with the most popular and highly searched areas being Bangsar, Mont Kiara and Cheras. Property types that are most searched in these 3 areas are condominiums, followed by apartments and townhouses. The reason for high-rises being the most preferred property type in Kuala Lumpur may be due to their more affordable entry price points.

Selangor

Selangor has seen one of the sharpest decline in prices as compared to Johor, Kuala Lumpur, and Penang. The Selangor market index saw a decline of 0.8% in Q1 2018, followed by an incline of 2.8% in Q2 2018. The index then dropped again by 1.3% in Q3 2018.

The rental prices of residential properties in Selangor has also begun to decline since the beginning of 2018. While it enjoyed steady and even increasing rental rates from Q4 2016 to Q4 2017, it began to decline by 4.2% in Q1 2018, 0.7% in Q2 2018 and 2.2% in Q3 2018.

The demand for properties in Selangor continues to be high, with properties in Petaling Jaya, Shah Alam, and Subang Jaya topping the list in this order. Properties that are most searched for in these areas are condominiums, followed by apartments, and terrace houses.

Penang

The prices for Penang properties have been on a steady decline. While the index saw an improvement of 0.6% in Q1 and Q2 of 2018, they declined again by 1.5% in Q3 of 2018.

As opposed to Kuala Lumpur, Selangor, and Johor which saw a dip in their rental prices, Penang has had a very stable price trend, which saw an appreciation of 1.7% in both Q2 2018 and Q3 2018.

The most popular residential areas within Penang are Georgetown, Bayan Lepas, and Tanjung Tokong, with the common factors of all four locations being their centrality to either the city centre or the Penang International Airport. Apartments and condominiums are the most desired types of residential properties in this area, followed by townhouses.

Johor

As of Q3 2018, Johor has seen a decline in its prices for the second time in 2018. While there was a dip of 0.8% between Q4 2017 and Q1 2018, the prices for properties in Johor increased by 2.1% again between Q1 2018 and Q2 2018. This was then followed by stronger dip of 3.1% in Q3 2018, Johor’s strongest decline yet since Q4 2016.

As compared to Kuala Lumpur, Selangor, and Penang which has been facing a downtrend since 2016, Johor was the only state that was experiencing an uptrend. The fact that its prices is beginning to dip shows that the property prices in Johor may finally be correcting.

Similar to its asking prices which saw a decline, the rental prices in Johor have also begun to see a dip. For the first time since Q4 2016, the asking rental prices for residential properties in Johor dropped by 3.5% between Q2 2018 and Q3 2018.

The most popular locations within Johor that property buyers are looking at are Johor Bahru, Nusajaya, and Bukit Indah. And unlike the other states where property buyers were most interested in high rises, in Johor the demand is highest for landed properties, especially terrace houses.

Here’s how you can take opportunity of the market condition

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.

The initial optimism expressed post GE14 is beginning to wear off as buyers are adopting a more cautious approach. Property buyers should expect the property market downtrend to continue in the first half of 2019, with a chance of market recovery post the third or fourth quarter of 2019.

A continued but stable price downtrend is not necessarily a negative development as shown over the past 2-3 years. 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. In fact, this is the best time for Malaysians to consider owning their own homes. Here 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.

Here Is Our GuruView For The Year Of 2019:

1) Increased Public Transport Ridership to Boost Demand for Transit-oriented Development (TOD) Properties

With the various incentives offered to boost public transport ridership under the Budget 2019, there is expected to be a strong upswing in demand for properties strategically located or directly connected to the MRT and LRT lines.

However, the impact may be felt more in rental demand as most of those using public transport are typically younger, from the working class, or middle-income Malaysians who may not be able to afford a home due to the gap between income levels and property prices.

Properties with direct access to public transport will continue to see strong demand and though emerging supply may have a dampening effect, rental rates for properties are likely to hold.

Beyond location, there are other factors that impact demand for a particular property such as, “Is it maintained well? Is it a new or old development? What facilities are provided? All factors must be considered, which is why there are always exceptions to the rule with some still seeing price appreciation while others may see price decline that exceeds the benchmark, despite the general downtrend for property price.

2) Smaller Units with Bigger Lifestyle Possibilities

Given unaffordability issues and scarcity of space in the city centre and key urban areas, developers will continue to build smaller, high-rise units – 450 to 840 square feet, which offer flexible spatial layouts to cater for varying demographic segments (single adults, young couples, 2+1 families, newly-weds, senior citizens or empty-nesters, etc.) These units will offer space-saving furniture to allow for greater space utility.

Dual key units are likely to be popular to those who wish to work and live at the same place. These smaller sized units will be built closer to public transportation and will come with more facilities. The latter will be a key determining factor for developers to win over buyers.

Buyers are accepting smaller homes as part of the reality of urban living. We have seen this trend since 2016. But they will not compromise on lifestyle. Hence, facilities and retail experiences, as well as seamless connectivity will be key determinants in winning over home buyers, especially Gen-Y and millennial.

3) Buyers Market but High Prices Remain a Challenge for Most

Despite the many positive initiatives announced for Budget 2019, the case of absolute high price of homes when compared to median income of most Malaysians is expected to remain the biggest stumbling block to home ownership, followed by lack of financing visibility.

The truth is home unaffordability is a difficult problem to resolve. Recent initiatives to aggressively manipulate market forces by bringing down home prices will lead to dissatisfaction among existing home owners, as they would potentially lose out on the equity and wealth they’ve built over the years.

A smarter move would be to look into the average annual capital appreciation of homes. This would be more sustainable in the long-term to ensure that prices stabilise over time for wealth preservation potential, while ensuring that aspiring homeowners can still afford to come onboard.

While 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 yet due to the various market dampening factors.

To keep up to date with the Malaysian property market, visit the PropertyGuru Market Index

 
Consumer Sentiment Survey revealed that improving sentiment may persist going into 2018, as consumers react positively to issues of oversupply in the market, improved assistance from the government for affordable home ownership and macro-economic factors.

The sentiment is further supported by the stable price perception for all property types in Malaysia and consumer satisfaction has improved with a greater number of buyers looking to transact in the next six months.
 

For the latest property news, trends, resources and expert opinions, visit our Property News section. Home buyers, sellers or property renters looking for Malaysian Properties, may like to visit the New Launches or Project Reviews page.

 
As a property seeker, it is important to keep abreast with the latest offerings and waivers that would ease homeownership, mainly first-time homebuyers.

Therefore, those aspiring to purchase a property in 2018 should understand how much one can benefit from the stamp duty (levy on legal documents) tax exemption for first-time house buyers implemented by the government from 1st January 2017 to 31st December 2018.
 

 
 

For the latest property news, trends, resources and expert opinions, visit our Property News section. Home buyers, sellers or property renters looking for Malaysian Properties, may like to visit the New Launches or Project Reviews page.

 
With a wide range of properties to choose from, take a look at the breakdown of what buyers prefer and where.
 

 

For the latest property news, trends, resources and expert opinions, visit our Property News section. Home buyers, sellers or property renters looking for Malaysian Properties, may like to visit the New Launches or Project Reviews page.

Observing the property buyer’s sentiment in Indonesia, Malaysia, Thailand and Singapore, it becomes clear that the sentiments in Thailand and Indonesia vastly differs from the sentiments in Malaysia and Singapore.

Below are just some of opinions shared by the many property buyers across all 4 countries.

Diane Foo Eu Lynn, Senior Content Specialist at PropertyGuru, edited this story. To contact her about this or other stories email diane@propertyguru.com.my

For a quick look at PropertyGuru’s new projects, visit our New Property Launches or Project Reviews page.

The year 2017 has just begun amidst subdued celebrations and increased petrol prices. Nevertheless, property buyers still feel optimistic about purchasing a property despite facing financial problems.

For more information on new homes, visit PropertyGuru’s New Property Launch or Project Reviews page.

Malaysian mortgage loan rejection rates were at an all time high in 2016 at over 50%. The majority of the rejections were due to poor credit ratings from CCRIS where applicants were found to have bad or insufficient credit records.

Many are unaware of the CRA’s ability to collect all our personal credit data, and many wonder if it is even legal. And is it? Find out your CRA rights below!

Image sourced from iMoney

Diane Foo Eu Lynn, Senior Content Specialist at PropertyGuru, edited this story. To contact her about this or other stories email diane@propertyguru.com.my

By Mangalesri Chandrasekaran

When it comes to purchasing a house, many are unaware of the expenses that occur. When a new home is purchased from the developer, the buyer sometimes gets to enjoy rebate and discounts from the developer which helps to reduce the buyer’s burden.

However, things are quite different when it comes to acquiring subsale properties. So if you’re interested in acquiring a subsale abode and wondering roughly how much it will cost, fret not! We have the answer right here for you.

Let’s say you’re planning to purchase a subsale house which is priced at RM500,000; so what are the expenses that would incur during the home purchase?

1. Down Payment:

The first thing to purchase a subsale property is that you’ve to prepare a lump sum deposit of 10% to 30%. The bank will loan up to 90% financing for the purchase of first and second residential property, meanwhile, 70% loan for the third residential property onwards.

Hence, the buyer has to prepare between RM50,000 to RM150,000 cash for the down payment. The buyers who find it difficult to prepare a lump sum cash can opt to withdraw from their EPF 2nd account.

2. Sales and Purchase Agreement Legal fee:

In terms of SPA legal fees, 1% will be charged from the first RM150,000; 0.7% will be charged from the remaining RM1 million; 0.6% will be charged for the subsequent RM3 million.

Meanwhile, for property stamp duty, 1% will be charged from the first RM100,000; 2% will be charged from the subsequent RM500,000 and 3% will be charged for the remaining value.

The professional legal fee is also subject to 6% government tax and approximately RM1,000 to RM1,500 disbursement fee (estimation).

There are also 50% rebate on stamp duty for first time home buyers if your property price is less than RM500,000.

3. Loan Agreement Legal Fee:

For the property stamp duty, 0.5% will be charged from the total loan amount. Other than that, the professional legal fees, government tax on the legal fees, disbursement fees (estimated) and the stamp duty rebate for first time home buyers are similar to the charges above-mentioned in the Sales and Purchase Agreement Legal fees.

Sometimes these fees can be absorbed into the loan financing by the bank. However, this might result in a higher interest rate.

4. Valuation Fee:

When purchasing a subsale property, a formal valuation report will be submitted to the financing bank. This fee costs about 0.3% of the property value.

5. Bank Processing Fee:

When applying for a mortgage loan, banks will charge a one-time processing fee which will cost between RM50 to RM200.

See the infographic below to get a clearer picture of the upfront expenses that occurs while purchasing a home:

Mangalesri Chandrasekaran, Editor at PropertyGuru, edited this story. To contact her about this or other stories email mangales@propertyguru.com.my

Passive income is the all new in thing and buying properties to rent them out seems to be one of the most common ways of earning extra income. But before you start fixing your rental property up, you will need to decide on your target tenants first. Below are some tips for you to get started!

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Diane Foo Eu Lynn, Senior Content Specialist at PropertyGuru, edited this story. To contact her about this or other stories email diane@propertyguru.com.my

Below market value (BMV) properties are the gem of the property market, and what (relatively) easier way to get one than to buy a property on auction? But few dare to venture into the property auction market due to lack of knowledge. So here’s a short but succinct A-Z step-by-step guide on how to buy a property on auction.

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Diane Foo Eu Lynn, Senior Content Specialist at PropertyGuru, edited this story. To contact her about this or other stories email diane@propertyguru.com.my

The property market in Malaysia has been the talk of the town for quite some time, as the weak sentiment towards the market has created a state of ‘wait-and-see’ approach among buyers. However, many are still hopeful of the market in terms of long-term investment, as the market is foreseen to perform better in the coming years.

There are several factors which influence the market slowdown, as well as reasons on why property investment in Malaysia is still an interesting option.

To get a clear understanding of the current property market, check out the infographic below:

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Mangalesri Chandrasekaran, Editor at PropertyGuru, edited this story. To contact her about this or other stories email mangales@propertyguru.com.my

It is a norm these days that most residents prefer renting a home instead of purchasing one themselves. This situation can correlate to our country’s uncertain economy, weak sentiments towards the property market, affordability concerns and tight lending rules set by financial institutions.

To add on to this, the recent exit of British (Brexit) from the European Union has added more chaos, putting the global economy in jeopardy. This has caused the public to become extremely cautious in investing and the next best option they have is renting a house. Hence, many buyers now opt to rent a house instead.

In Q1 2016, Puchong topped the list as the most rented location in Kuala Lumpur and Klang Valley. Meanwhile, Petaling Jaya (PJ) came as the runner-up. But, the situation has changed now where Petaling Jaya takes the lead, while Puchong did not make it into the most rented locations for Q2 list.

Being an established location in Klang Valley, PJ is preferred by many due to many reasons. PJ comprises prominent areas, namely Bandar Utama, Kelana Jaya, Kota Damansara and Bandar Sunway – to name a few.

First and foremost, PJ is a gem of a location. This enclave is located in between places such as Kuala Lumpur, Puchong, Shah Alam, Seri Kembangan and Sungai Buloh.

This city also houses many established and renowned private firms, which encourages people to consider staying in PJ itself instead of staying elsewhere. This has caused the rental market to prosper, as the demand for rented homes is high despite being pricey.

In terms of accessibility, major highways such as Federal Highway, Damansara-Puchong Expressway (LDP), North-South Expressway (PLUS) and New Klang Valley Expressway (NKVE) links PJ to neighbouring suburbs. Meanwhile, there is also adequate public transportations available within which include light rail transit (LRT) service and the free PJ City Bus.

This mature city started growing many years ago when numerous developments started pouring in. Now this place is almost wholly developed with the scarcity of land being a major concern. Hence, the number of new developments launched here is very limited.

Besides that, PJ has a countless number of amenities within. Schools, colleges, shopping malls, food and beverage (F&B) outlets, hospitals, and the list goes on.

The above-mentioned points explain why PJ tops the most rented locations for Q2 2016. Besides PJ, the other areas which made it to the top five most rented locations include KLCC, Mont Kiara, KL City and Cheras.

At the moment, the rental market appears to be performing well as many people avoid acquiring properties. But this situation may take a turn following the recent announcement by Bank Negara Malaysia regarding the cut in Overnight Policy Rate, which might encourage property investment among Malaysians.

Images: Sourced from wikimedia.org and cdn-hotels.com

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Mangalesri Chandrasekaran, Editor at PropertyGuru, edited this story. To contact her about this or other stories email mangales@propertyguru.com.my

Waste management is a major issue in Malaysia, and the newly implemented waste segregation ruling hit many unawares. Due to the lack of guidelines and public awareness, the majority of the households have yet to begin practicing separating their trash.

Some of the common confusion include the method of separation, whether they should use different coloured plastic bags and whether they should have different bins outside their homes for each different type of trash.

PropertyGuru has addressed all these concerns with a comprehensive article and a simple infographic that walks readers through the process step-by-step.

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Diane Foo Eu Lynn, Senior Content Specialist at PropertyGuru, edited this story. To contact her about this or other stories email diane@propertyguru.com.my

According to an infographic released by PropertyGuru, the Face Platinum Suites tops the list as being the top rented condo in Malaysia.

Four of the highly rented high-rise residences are located in Kuala Lumpur. Meanwhile, five top rented condos’ are located in Johor. Besides KL and Johor, there’s one condo in Penang, Quayside, which manages to enter the list as well.

There are several factors which determine why certain developments are the preferred choices for rental. Among them are:

• Location
• Facilities
• Accessibility
• Rental rates

At the moment, the top rented condos in Malaysia are:

1. Face Platinum Suites

Face Platinum Suites is an elegant high-rise residence situated in Kuala Lumpur, which is located just minutes away from KLCC. Highly preferred due to its strategic location in the city centre, this 51-storey building consists 733 units in total.

2. Twin Galaxy Residences

Developed by Golden Oriental Realty, this residence in Johor consists of two 35-storey towers with a total of 668 units. Located within a short stroll from a myriad of amenities, the Danga City Mall KTM Station is located merely walking distance away.

3. Tropez Residences

This is a freehold luxury condominium project, which consists of two 38-storey towers and a 28-storey tower. Consisting a total of 1,149 units. this residence is located in Danga Bay, an upcoming township in Johor, which has easy accessibility Singapore.

4. Palazio

Palazio is a high-density development in Johor, which offers a total of 6 blocks. Developed by Mayland Austin, this residence is strategically located nearby many amenities; and it takes about 30 minutes to reach Johor CIQ.

5. Greenfield Regency

Located in Johor, this freehold condominium consists of 2 towers with a total of 561 units. This residence is located 30 minutes drive sway from the Johor CIQ, which links to Singapore.

6. Quayside

Quayside is a serene seafront resort condominium development located in the popular tourist haven of Tanjung Tokong. This residence comes with a myriad of facilities which includes a waterpark, 7 acres of landscaped gardens and an open park.

7. St Mary Residences

St Mary Residences is a new serviced apartment development located in the popular hotspot in Kuala Lumpur adjacent to the famous Petronas Twin Towers. The development consists of three 28-storey apartments that house 457 residential units.

8. The Elements

The Elements is a high-rise luxury condominium located in the vicinity of Ampang Hilir in Kuala Lumpur. The condo comprises of 1,040 residential units and highly accessible via several highways and LRT stations.

9. Regalia

The Regalia is a freehold serviced residence located in Kuala Lumpur. This residence is situated within the KL city centre and is a few minutes from the Putra World Trade Centre (PWTC). There are commuter stations and LRT station within a short walking distance.

10. Nusa Heights

This property comprises of 5 blocks which house a total of 910 units of service apartments. Nusa Heights is located just minutes away from several country clubs, Educity and Legoland.

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Mangalesri Chandrasekaran, Editor at PropertyGuru, edited this story. To contact her about this or other stories email mangales@propertyguru.com.my

Buying a property is a good idea. Yet with the current sluggish market, many are finding it convenient to rent instead of purchasing a property due to issues pertaining affordability and finance.

With the current increase in property prices and tight lending rules, people are struggling to acquire mortgage loans, let alone afford the property. However, renting a home allows you to breathe a little easier knowing you’re not obligated to a bank.

The location tops the list when buyers are considering a rental property, followed by the rental rate, size, numbers of rooms, furnishing and so on.

According to PropertyGuru, the leading property portal in Asia, Puchong is the number one most rented location in Klang Valley. Meanwhile, Petaling Jaya, Mont Kiara, KLCC and Cheras come right after as the second to fifth most rented locations.

A good reason why Puchong is the most preferred choice for rental is non-other than its strategic location situated in between Petaling Jaya and Kuala Lumpur. It is easily connected via several major highways namely Shah Alam Expressway (KESAS) and Damansara – Puchong Highway (LDP). There are also ample of job opportunities available within, as well as containing a myriad of amenities such as shopping malls, F&B outlets, eateries, supermarkets, entertainment hubs and many more.

Being one of the most established locations in the Klang Valley, Puchong is also considered by many due its easy connectivity. The Bandar Kinrara LRT Station started operating in October 2015, meanwhile, the upcoming IOI Mall, Bandar Puteri, and Pusat Bandar Puchong LRT Stations are scheduled for completion by March 2016.

Besides Puchong, the other most rented locations such as Petaling Jaya, Mont Kiara, KLCC and Cheras are also preferred by many due to its advantageous location, amenities, as well as the easy accessibility it offers.

Mangalesri Chandrasekaran, Editor at PropertyGuru, edited this story. To contact her about this or other stories email mangales@propertyguru.com.my