The property market continued on a gradual trend of improvements in Q4 2021, following the liberalisation of movement controls and economic activity in the final quarter of 2021. A high vaccination rate, increased business activity and moderation of the unemployment rate to 4.3% in Q4 2021 (the lowest since Q2, 2020) resulted in an uptick in overall property market activity.
Going forward, however, the market faces new complexities in terms of consumer confidence, as COVID-19 continues to be a factor in our lives, and as economies around the world continue to find their footing in an altered social and commercial landscape.
With this in mind, PropertyGuru DataSense is evolving the Malaysia Property Market Report (MPMR) with the inclusion of additional data to best capture the mood and trends of the market with a new, clear and concise methodology.
The MPMR Q1 2022 report will be based on three main indices; the Price Index, Supply Index as well as a newly introduced Demand Index that will cover both the sale and rental markets. Based on strong interest via advanced inquiries for listings captured on PropertyGuru.com.my, the Demand Index enhances the report with a comparative look at rental and sale market performances, offering meaningful insights into current price movements as well as supply-demand trends.
Additionally, the MPMR will adopt a new baseline quarter of Q1 2018, moving forward from the previous baseline of Q4 2016 to more accurately reflect price, supply, and demand trends in the contemporary market environment.
Report Highlights
- Get The Guru View
- Malaysia Property Sales Market Index
- Malaysia Property Rental Market Index
- Conclusion
- Download The Full Report
Read the online report here:
View OnlineGet The Guru View: Key Findings of the MPMR Q1 2022
Malaysia Property Sales Market Index
Overall, the property market ended on a weaker note in Q4 2021 than the previous quarter. The Sale Price Index, which measures the confidence of sellers via asking prices listed on PropertyGuru.com.my, saw a slight drop of 0.19% QoQ in the final quarter of last year, in contrast to the 0.92% QoQ growth registered in Q3 2021. While yearly price movement showed an uptick of 0.14% YoY, this was a slight contraction on the 0.17% YoY growth in the previous quarter.
Despite this, the market remains cautiously optimistic about continued improvements in the general market environment as the year progresses, on the back of better economic conditions as the GDP is forecasted to expand to 5.5% – 6.5% in 2022.
The Sale Supply Index, which provides a view of supply trends through the volume of newly launched and resale property listings on PropertyGuru.com.my, reflects some of this confidence. In Q4 2021, supply moved up by 13.54% QoQ, following negative growth in the previous quarter. Supply also grew by 22% YoY, compared with 5.3% YoY growth in the preceding quarter.
However, the property market does face some immediate challenges. Among them is a lack of incentives for buyers since the government-initiated Home Ownership Campaign (HOC) ended on Dec 31, 2021.
MPMR’s Sale Demand Index, which represents the proportion of interested property seekers based on inquiries for homes listed on PropertyGuru.com.my, captured a sizeable 36.56% QoQ drop in interest during Q4 2021. From a yearly perspective, the index saw a 7.7% YoY decline.
A contributing factor to reduced demand for property purchases during this period could be difficulties in obtaining adequate financing, as banks apply a cautious approach towards large margin loans in the current economic climate.
Top 10 Best Selling Projects Since Q4 2020
Our analysis of the best-performing projects in the country reveals a mixed bag of motivators for different income sets. A common denominator, however, is the fact that projects that offer landed properties have outperformed high-rises. This indicates a desire for spacious private surroundings continues to be in high demand.
Top 10 Transacted Areas Since Q4 2020
Given that landed properties currently dominate transactional activity in the market, the top performing areas are largely defined by locales that provide conducive and convenient environments for landed living.
Malaysia Property Rental Market Index
Rental prices saw upward movement in Q4 2021, registering 0.74% QoQ growth on the Rental Price Index despite being in negative territory in the previous quarter. On a yearly basis, however, rental prices continued on a declining trend by dipping by 2.91% YoY. Even so, this was an improvement on the 7.93% YoY drop it registered in the previous quarter.
The Rental Supply Index also saw an increase of 13.78% QoQ, despite registering a 7.9% YoY drop. This too was an improvement on the 19.86% YoY decline registered in the preceding quarter.
Overall, the data points to an improving rental market, which can be explained by increasing demand for rental properties. The Rental Demand Index found that demand increased substantially in Q4 2021, with a hike of 30.53% QoQ and 57.91% YoY.
This is especially prominent when compared against the 11.83% QoQ drop in rental demand registered in Q3 2021, signifying a notable change in trend.
The trend could be indicative of shifting priorities among some home seekers who continue to face challenges in securing a home purchase in the current uncertain economic climate. As a result, they might now be refocussing on rental options as a means to make lifestyle improvements.
Top 10 Best Performing Projects Among Renters
High-rise projects ideally located within vibrant urban districts proved to be the most popular properties to rent since Q4 2020, with the top three performers being located in popular locales in the Klang Valley.
Conclusion
Recovery of the property market will continue to be closely linked with the overall health of the national economy, so any positive news on that front will have a beneficial spillover effect on the property sector. The expected 5.5% to 6.5% expansion of GDP growth will certainly boost consumer confidence, income security and impact buyer behaviour as the year progresses.
In the meantime, demand for property purchases will continue to drive attractively-priced landed properties in strategic locations. The rental market will grow as demand increases among those who opt to put off purchasing plans during this period of economic uncertainty.
For more insights and analysis, download the full Malaysia PropertyGuru Market Report Q1 2022 report:
PropertyGuru MALAYSIA PROPERTY MARKET REPORT Q1 2022
For more insights and analysis, download the full report here:
Or, read our previous Property Market Reports here:
Past PropertyGuru Malaysia Property Market Reports
Read our previous Property Market Reports here
Disclaimer: The information is provided for general information only. PropertyGuru International (Malaysia) Sdn Bhd makes no representations or warranties in relation to the information, including but not limited to any representation or warranty as to the fitness for any particular purpose of the information to the fullest extent permitted by law. While every effort has been made to ensure that the information provided in this article is accurate, reliable, and complete as of the time of writing, the information provided in this article should not be relied upon to make any financial, investment, real estate or legal decisions. Additionally, the information should not substitute advice from a trained professional who can take into account your personal facts and circumstances, and we accept no liability if you use the information to form decisions.