Malacca, Penang, And Johor Show Increase In Property Enquiries
We saw how badly the Malaysian property industry was affected during major global economic shocks like the Asian financial crisis in 1998, the ‘dot-com’ bust of 2000, and the stock market crash of 2008.
And now, in 2020, the shock stemming from the COVID-19 pandemic and the subsequent Movement Control Order (MCO) has hit Malaysia’s real estate market hard since 18th March 2020.
We looked at PropertyGuru Malaysia’s listings data on properties for sale from 3rd to 9th of May in order to analyse the real time effect of the virus on various key states, and here are our findings.
First up, the two undisputed champion states when it comes to property sales: Kuala Lumpur (KL) and Selangor. For the time period that we looked at, both states witnessed a drop in the total number of property enquiries Week-on-Week (WoW).
In KL, there was a -2% decline WoW, compared to the previous week (26th April to 2nd May) which stood at +1%. The neighbourhoods which had the steepest decline in property enquiries was Ampang Hilir (-56%), followed by Mont Kiara (-41%) and Taman Melawati (-34%).
Selangor, on the other hand, saw a slightly bigger decline at -7% WoW. This was in addition to the previous week which also saw a decline of -7% WoW. This drop was, in large part, due to districts such as Kuala Langat (-42%), Puchong (-34%), and Rawang (-33%).
These two states may have lost their title as the most popular for property seekers partly due to the fact that they have gained (and maintained) the title of ‘states with the highest number of confirmed COVID-19 cases’. In KL, there were 1,414 cases whereas in Selangor, there were 1,596 cases as at 9th May, according to the Ministry of Health.
In their place, 3 other states have started to emerge as gaining in popularity amongst property seekers. Malacca saw the highest increase WoW, at +42% (as compared to its previous week of -28%). Next was Penang with +23% (its previous week stood at -1%), then Johor with +11% (a slight deterioration from its previous week’s +21%).
In Malacca, there were 3 districts that were top on property seekers’ lists:
Penang’s top 3 districts that contributed to its rise in popularity was:
Finally, the 3 districts in Johor that helped its property market improve was:
These 3 states may currently be seeing the most activity when it comes to property seeking due to the fact that when the country’s economy takes a heavy beating (i.e. the COVID-19 pandemic), property is one of the best forms of investment.
Other forms of investment that were once the traditional cornerstones that people liked trading in, such as stocks, bonds, crude oil, and gold, are already taking a hit in their respective values. On the other hand, property is a tangible asset, and a good long-term plan for investment purposes.
The prices of homes may see a marginal drop now as sellers scramble to find willing buyers. So, for those with the financial means, it’s an opportunity for them to ‘park’ their money there and wait for prices to recover and increase once more.
Malacca, as one of the UNESCO World Heritage Sites in Malaysia, is a good location for those who entered the real estate game for investment purposes, by banking on the tourism industry when it recovers in the future.
During H1 2019, the tourism industry brought in RM41.69 billion to the country’s revenue, with the top 3 international tourist arrivals were from Singapore (5.4 million people), Indonesia (1.9 million), and China (1.6 million).
A study by Hotels.com revealed that Malacca, Penang, and Johor were among the top travel destinations preferred by Singaporeans, which could be one of the contributing factors as to why we’re seeing these states overtaking KL and Selangor in popularity this past week.
And as Malacca’s property prices are more affordable compared to the other UNESCO World Heritage Site (Penang, of course), plus it’s much more developed in its entirety compared to Johor (which is still up-and-coming), then those factors may have helped drive it to the number 1 spot for this time period.