On 5th June 2020, an announcement was made by Malaysia’s Prime Minister Tan Sri Muhyiddin Yassin on the PENJANA – Economic Recovery Plan (ERP), worth RM35 billion.
In it, were a multitude of measures designed to help people and ensure the continued survival of businesses. One of it was the reintroduction of the Home Ownership Campaign (HOC), which will end on 31st May 2021.
If you’ve forgotten what that campaign was all about, here’s a quick refresher:
- Selected projects from participating property developers will enjoy a minimum of 10% discount.
- If your property is priced between RM300,000 and RM1 million, there’s a full stamp duty exemption on the instruments of transfer.
- If your property is priced between RM300,000 and RM2.5 million, you’ll get a full stamp duty exemption on the Sales and Purchase Agreement (SPA) signed between 1st June 2020 to 31st May 2021.
In addition, there is the exemption on Real Property Gains Tax (RPGT), which means that any profits which you earned from selling off your residential property from 1st June 2020 to 31st December 2021, will not be taxed. This is limited to 3 residential properties per Malaysian citizen.
Finally, there is also the lifting of the 70% margin on a home loan for the third residential property that’s valued at RM600,000 and above.
With so many stimulus measures in place, it was only a matter of time before the overall market sentiment would start to reflect a more positive stance.
We decided to take a look and analyse PropertyGuru’s extensive property listings from the period of 16th May to 16th June 2020, in order to see if people had started to feel more confident in resuming or beginning their homebuying process.
*Editor's note: The data was taken from the 'For Sale' listings on PropertyGuru.com.my.
That confidence was to be seen across the 4 major states of KL, Selangor, Penang, and Johor, where there was a clear-cut increase in the number of sales enquiries.
Up first is the state which recorded the highest growth: Penang, with an increase of 17% Month-on-Month (MoM). The areas that contributed to this were Timor Laut (Island) with +34%, followed by Bukit Mertajam with 20%, then Bayan Lepas with 10%. However, the major city of Georgetown surprisingly recorded a decrease of 28%.
A close second in growth is Johor, with an increase of 17% MoM. Here, it was Iskandar Puteri (+23%), Johor Bahru (+14%), and Pasir Gudang (+8%) that were the areas with the most interest from property seekers.
Selangor and Kuala Lumpur (KL) demonstrated an increase in their number of property enquiries as well, both by 14%, during the analysis period.
For the former, it was thanks to areas such as Kajang (+26%), Subang Jaya (+25%), and Shah Alam (+18%) that escalated its growth. Whereas for the latter, it was in due part to neighbourhoods such as Damansara (+24%), Cheras (+19%), and Bukit Jalil (+18%).
We then decided to dig a little deeper and take a look at the performance of these 4 states on a Week-on-Week (WoW) basis, in order to further investigate if the ERP announcement had a positive impact on the property market.
From the week of 1st to 7th June 2020, this is the percentage increase in property enquiries for the respective states:
- Johor: +26% WoW
- Penang:+19% WoW
- Selangor: +17% WoW
- Kuala Lumpur: +12% WoW
This may be due to the fact that people were starting to have more hope in the real estate industry, and thus were on the lookout for their dream home.
Now, as the country enters the Recovery Movement Control Order (RMCO), travel restrictions are loosening and life is slowly returning to its norm, pre-MCO.
As people are now granted the ability to go for property viewings, albeit with proper Standard Operating Procedures (SOP) in place, it is possible that this is one of the main reasons as to why these key areas are seeing such a healthy increase in the number of enquiries.
There is also the fact that the number of confirmed COVID-19 cases have dropped exponentially during our analysis period. Case in point: On 8th, 9th, and 10th June, Malaysia recorded single-digits for the first time since the MCO was implemented, and this was seen once more on 14th June.
As it seems that our country is finally on the right track to flatten the curve, this has helped people to regain confidence in continuing their property search journey during a time when it’s a buyers’ market.