Most Popular States, Price Ranges And Property Types in May on PropertyGuru
As Malaysians slowly adjust to life with the “new normal” in place, the debilitating impacts of COVID-19 on the economy across all sectors continue to be felt. And we can expect to see the same gloomy outlook in the property sector.
However, according to the Malaysian Institute of Estate Agents (MIEA) President Lim Boon Ping, while real estate prices will see a decline due to a significantly lower housing demand, he is of the opinion that the drop would be less painful.
While Indonesia saw a drastic drop in their real estate prices by up to 50%, Malaysia should be seeing a slower price adjustment after the Conditional Movement Control Order (CMCO) has been lifted, probably 10-20%.
It would seem that potential homebuyers are also getting themselves prepared to begin (or resume) their property hunt, and the virus pandemic did little to dampen their appetites.
Michael Geh, President of the Malaysian chapter of the International Real Estate Federation (FIABCI), has stated that the property sector remains active and that he agrees with a statement by Bank Negara Malaysia (BNM) on the real estate market remaining resilient in 2020.
In order to examine if this situation really is the case, we took a look at data from PropertyGuru Malaysia’s extensive property listings (1st Apr to 31st May 2020), to see what the overall appetite is like.
*Editor’s note: The data was taken from the ‘For Sale’ listings.
3 out of 4 major states showing signs of improvement
As the overall market sentiment starts its trend towards normalisation, the property sector is also showing signs of improvement, as our data shows.
First up, is the all-time champion: Kuala Lumpur (KL). During the analysis period, it saw an increase in the number of enquirers by 15.4% in May, Month-on-Month (MoM).
This positive trend was echoed in 2 other major states, Penang and Johor, with 50.3% and 32% respectively. However, the Selangor state recorded a negative trend during this period, with -2.5% MoM.
Fun fact: Did you know that Perlis also saw quite a large increase of 44.4% MoM, whereas Kelantan had the biggest drop in number of enquirers at 50.7%?
The confidence of home seekers is slowly coming back after almost 3 months of a lockdown, but is still less aggressive compared to pre-CMCO.
As the number of property enquirers slowly increase in May, it would indicate that people are now moving from merely being aware of the properties on offer, to actually enquiring about them.
In the month of April, people were doing a lot of window shopping in order to identify potential properties, and now is the time when they would consider taking the next step.
Property developers are promoting their projects more aggressively, while subsale property owners are more motivated in selling (willing to drop their prices) in order to finance themselves or strengthen their cash position.
As such, the people who can afford (financially prepared) are now more open to the idea of buying a home – with so many motivations in place, they’re coming out of the wait-and-see mentality.
Top 3 most searched price brackets
As stated earlier, with the steady improvement of market sentiment and home seeker confidence very slowly (but surely) returning, those who were holding back are now actively searching to take the leap.
These are the people with cash on hand and/or are looking for a home instead of an investment, so it should come as little surprise that the top most searched price bracket on PropertyGuru Malaysia is the RM701,000 to RM1 million (+33.7% MoM).
The other 2 most popular price brackets are RM501,000 to RM700,000 (+17.8% MoM) and RM151,000 to RM300,000 (+3.2% MoM).
With BNM slashing the Overnight Policy Rate (OPR) for the third time in May to 2% (the lowest ever since 2009/2010), people are now more encouraged to buy, since interest rates for a home loan will be much lower as well.
It’s now a buyer’s market out there, what with all the factors above combined with increasing housing supply, and the effects are starting to show in the data.
Top 3 property types with the most enquiries
Where once high-rise type of developments used to be the favourites of homeowners, it would seem that the trend is slowly shifting over to townhouses, which is steadily gaining in popularity.
During the analysis period, townhouses garnered a 46.7% MoM increase in the number of enquiries, whereby condominiums came in second with +40.5% and apartments at +30.8%.
The increase in demand for townhouses could be from well-established townships such as Eco Ardence by Eco World, which is featuring more prominently on the list of home seekers.