PropertyGuru Malaysia Property Market Index Q2 2021

Shawn Ng
PropertyGuru Malaysia Property Market Index Q2 2021
The property market put in a softer-than-expected performance in the first quarter of 2021 (Q1 2021), as resurging COVID-19 infections in the country and the reimposition of stringent Movement Control Order (MCO) regulations impacted commercial activity and further dampened consumer confidence in the early part of the year.
The Malaysia Property Market Index (MPMI) found that the overall median asking price psf dropped by 1.79% year-on-year (YoY), while overall supply grew by 15.85% — the most significant increase since Q1 2020. Nevertheless, consumer sentiment is expected to improve in tandem with increased of vaccinations as the year progresses.

Report Highlights

  1. Get The Guru View
  2. Price Index Overview
  3. Supply Index Overview
  4. Regional Analysis

  5. What It Means For Those Hoping To Buy/Sell In The Current Market
  6. Conclusion
  7. Download The Full Report

Read the online report here:

Get The Guru View: Key Findings of the PMI Q2 2021

PropertyGuru Property Asking Price Index Overview

The MPMI, a study that tracks the asking prices in primary and secondary property markets on a quarterly basis, found that the overall median asking price psf in four key markets in Malaysia – KL, Selangor, Penang and Johor – declined by 1.79% year-on-year (YoY) in the first quarter of 2021 (Q1 2021).
Asking prices also resumed a downward trend on a quarter-on-quarter (QoQ) basis, dipping by 0.84% to 87.86 points in Q1 2021, despite an encouraging performance in the immediate preceding quarter that hinted at stabilisation. In Q4 2020, the overall median asking price psf held firm at 88.6 points, same as in Q3 2020.
The unexpected spike in COVID-19 in January and February this year is likely to have impacted consumer sentiments and added downward pressure on asking prices, indicating that the market continues to be sensitive to pandemic-related developments.
As such, the coming months are expected to see fluctuating price trends while uncertainties persist. Similarly, positive developments on the vaccination front will likely shore up consumer confidence as the year progresses.
The market activity in 2020 also indicates that demand continues to be strong for selected properties within popular or sought-after locales, where prices are still moving upwards amidst the overall downward price trend across the country.
Along with examples of quick-selling projects in the Klang Valley, such as Gamuda Land’s Enso Woods and EcoWorld’s Eco Business Park this demonstrates that although buyers are cautious, they are still keen to engage in the market when the opportunity is right.

PropertyGuru Property Supply Index Overview

Tracking the volume of new supply via listings on PropertyGuru, the MPMI found that overall supply of new property in the market spiked by 15.85% YoY in Q1 2021. The data also revealed that this is the highest volume of supply growth recorded since Q1 2020, prior to when the full impact of the pandemic was felt in the market.
The overall supply trend has also reversed the quarterly decline recorded in Q4 2020, growing by 2.71% in the first quarter of the year.
The government’s decision to allow the construction and property development industry (as well as other vital sectors) to continue to operate during periods of heightened movement restrictions, has contributed to the growth in supply.
However, the robust turnaround of supply volume between Q4 2020 and Q1 2021 in key regions captured by the MPMI is indicative that developers are keen to get on with business and are confident about an eventual recovery on the horizon.
Despite still coping with an oversupply situation in the market, the latest data from the National Property Information Centre (NAPIC) noted that much of the new residential launches in Q4 2020 (47.05%) are priced at RM300,000 and below, followed by those that are priced between RM300,001 and RM500,000 (31.98%).
At this price benchmark of RM500,000 and below, many of the new residential launches (79.03%) are unlikely to significantly add to current overhang woes, as it will be a better fit to address existing consumer demand for more affordable properties.

Top Performing Regions and District Analysis

Kuala Lumpur: Prices Continue to Contract

KL continues to cope with declining prices, recording a 5.00% YoY drop in median asking prices psf in Q1 2021. This is the largest yearly drop in the median asking prices since it began to slip into negative territory in Q1 2019.
Similarly, KL also recorded its fourth consecutive quarterly drop, dipping slightly by 0.66% QoQ from the previous quarter. KL last recorded positive quarterly price growth in Q1 2020.
Overall, the more than two-year downtrend – which preceded COVID-19, but is now being accelerated by it – can be seen as a price correction trend that began following a challenging economic period and highly-priced mismatched property offerings.
However, a return to positive territory for supply, which grew by 0.52% QoQ and 2.03% YoY, indicates that market players continue to bank on the long-term potential of the capital district, albeit with more affordable property options.
Meanwhile, areas within KL that are bucking the declining price trend include Taman OUG in Kuchai Lama which saw an 8.58% QoQ increase in median asking price psf, Taman U-Thant in Ampang Hilir which spiked by 8.00% QoQ, and Kampung Datuk Keramat which moved up by 4.80% QoQ.
Data from MyProperty Data shows that Cheras Kuala Lumpur generated the largest volume of transactions in 2020, followed by Setapak and Taman OUG. As with previous quarters, condominiums and apartments continue to be the most sought-after property types in KL last year.

Selangor: Beating the Odds

The median asking price psf in Selangor remained in positive territory in Q1 2021, going against the grain of nationwide declining prices by registering 0.85% YoY growth and a slight uptick of 0.01% QoQ. This is, however, a comparatively lower growth rate than the 0.84% QoQ and 2.79% YoY gains made in Q4 2020.
Selangor’s resilience in the current crisis environment is also boosting confidence in development activity in the state, on the back of its robust population growth as well long-term economic potential.
This can be seen in its 6.22% QoQ growth in supply, the largest quarterly growth among the four regions, as well as its 25.66% YoY supply increase, which is the second-highest in the country after Penang.
Among the key districts helping to keep median asking prices positive are Glenmarie in Shah Alam, where the median asking price psf rose by 8.46% QoQ, Bangi Lama in Bangi which increased by 7.27% QoQ and Bandar Teknologi Kajang which increased by 6.53% QoQ.
Klang, Kajang and Puchong generated the highest volume of property transactions in Selangor in 2020. Meanwhile, the most popular property type in the state last year is terrace houses, followed by condominiums and flats.

Penang: Moving Ahead With Growth

Penang is another region that has witnessed a long trend of downward price movement since Q1 2018. However, unlike other key markets, the change in median asking price psf has been on a gradual course that does not seem to be additionally affected by pandemic-related factors.
For example, the MPMI found that the 0.29% QoQ drop captured in Q1 2021, at the height of the most recent round of restrictions, was less pronounced than the 0.78% drop in the previous quarter.
On a YoY basis, Penang saw a 1.87% drop, which is slightly higher than the 1.71% YoY drop registered in Q4 2020.
Moving forward, the relative constancy of the Penang market is expected to prompt developers to move forward with planned projects in the state.
In fact, it recorded the highest yearly increase in supply, with 34.17% YoY growth, and the second highest quarterly growth at 1.19% QoQ. This is also the third consecutive quarter of positive supply growth for Penang.
Despite the ongoing downtrend of prices, some districts in Penang remain in positive territory. These include median asking price psf increases in areas such as Gurney Drive in Georgetown (3.26% QoQ), Simpang Empat in Sebarang Perai (3.10% QoQ), and Paya Terubong in Timor Laut (1.79% QoQ).
Bukit Mertajam recorded the highest volume of transactions in 2020, followed by Ayer Hitam and Butterworth, spurred by new affordable offerings. As such, flats were the most sought-after property type in the state, followed by terrace houses and condominiums.

Johor: Banking on Future Prospects

Unlike Penang, Johor’s downward trend of median asking prices psf has been accelerating since the advent of the COVID-19 pandemic. It registered the sharpest drop in asking prices among the four key regions, falling by 1.36% QoQ and 5.66% YoY in Q1 2021.
Currently, the state is also actively addressing its large oversupply situation and it is the only region that saw its property supply shrink in the first quarter of the year by 3.55% QoQ.
While supply continued to grow on a yearly basis, the 3.24% YoY increase is relatively small for a state that was still registering 24.68% YoY growth at the onset of the pandemic in Q1 2020.
Despite the current challenges, Johor continues to represent strong potential for the future because of its symbiotic relationship with neighbouring Singapore, and the geographic advantage it offers in terms of lower costing properties.
The recent revival of the Johor Bahru-Singapore Rapid Transit System (RTS) will also have a tangible impact on property prices in the area. As such, market sentiments are expected to be boosted once the COVID-19 situation improves and borders reopen.
In terms of positive median asking price psf movement, the best performing areas in Johor include Taman Impian Emas in Skudai (4.97% QoQ), Bandar Indahpura (3.75% QoQ), and Mount Austin in Johor Bahru (2.16% QoQ).
Data from MYProperty Data shows that Skudai, Tebrau and Kulai saw the highest volume of transactions in 2020. The most sought-after property type was terrace houses, followed by condominiums and semi-detached houses.

What It Means For Those Hoping To Buy/Sell In The Current Market


While the outlook was initially positive for a rebound by the end of the year, the high rate of COVID-19 infections and restricted movements at the start of 2021 might delay the expected recovery to 2022. However, positive contributing factors, such as soon-to-be-completed major infrastructure projects (with multiplier effects), the potential HOC extension and ongoing COVID-19 vaccinations will begin to make their presence felt in the current quarter and create an improved market environment.

Related Article

For more insights and analysis, read the full PropertyGuru Malaysia Property Market Index Q2 2021 report:

View Our Past Property Market Index Reports from 2020
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