When Is The 'Best' Time To Buy Property In Malaysia?

PropertyGuru Editorial Team
When Is The 'Best' Time To Buy Property In Malaysia?
If you’re looking to purchase a new home, you’re probably asking yourself – is this a good time to buy property? The answer to that question could make a big financial difference to you.
Property prices are constantly changing, but understanding which way they are moving in the areas you’re interested in is far more about knowledge, skill, and experience than it is luck.
You need the knowledge to understand current market conditions, experience to recognise what that means, and skill to identify and act upon those all-important signs of change.

Why Does Timing Matter In The Property Market?

Have you ever heard that old saying, "Time is money"? Well in the property market, it’s probably more accurate to say that timing is money.
In a market undergoing a period of rapid growth, delaying a purchasing decision could mean tens of thousands of Ringgit in price change. That’s a substantial amount when it comes to financing your purchase!
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On the other side of the equation, jumping in at the wrong time could mean you miss out on some substantial benefits or incentives which might have helped your property purchase.
If a market is slowing, there’s a good chance that prices might become more flexible, and developers will throw in nifty perks or financial incentives to encourage you to purchase a home.
That’s why it’s always good to look for the signs of a buyer’s market.

But… What’s A Buyer’s Market?

A buyer’s market describes a period in the property market that favours those looking to buy a home, rather than those looking to sell it.
Generally, this is down to an oversupply of properties available, and lower demand due to less people looking to buy. A buyer’s market, as the name suggests, is the ideal time to buy property.
Not all properties are impacted in the same way by these market conditions however. Popular properties in mature and desirable areas are far less likely to experience drops or stagnation of prices.
On the other hand, large new developments with an extensive range of empty units can be vulnerable to these changing conditions.
A good rule of thumb to remember: the more unique or highly desirable a property type is, the less likely it is to experience price drops due to the current market conditions.
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What Other Factors Impact The Property Market?

Supply and demand is a fairly broad term.
While the availability and oversupply of properties on the market makes a big impact on overall market conditions, the question of demand is affected by a wide range of factors that can impact property prices.
Low public confidence, a poor economy, political or economic uncertainty, unemployment, interest rates, these are all factors that can impact demand for property.
If people are uncertain about their financial future, they are less likely to make a big money purchase like property.
In the same way, interest rates can play a part in affordability of finance, meaning the number of buyers on the market is limited due to inability to access a home loan.
In those circumstances, the buyer’s market can be particularly positive for any homebuyer who does have access to available funds.

What Kind Of Market Does Malaysia Have Currently?

Malaysia’s property market has traditionally been a resilient market. Prices have consistently risen over the past few decades.
But the rate of change over that time paints a picture of evolving marketing conditions.
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The total value of residential properties sold annually enjoyed an upward trend from 2002 through to 2014 according to data from the National Property Information Centre (NAPIC), more than tripling from RM21 billion in 2002 to RM82 billion in 2014.
This period represents a strong period of growth in Malaysia’s property market, and is widely viewed as having been a property market boom.
Since 2013-2014, however, the property market has shown signs of slowing down.
Both the number of transactions, and total value, have fallen or stagnated in the period up to 2017, with the latest figures indicating a continuation of this trend.
The Malaysian Housing Price Index, compiled by NAPIC, reveals similar insights into a changing market over recent years.
The index reveals year-on-year changes of 13.4% relative house price growth in 2012; 11.2% in 2013; a gradual slowing to 9.4% in 2014; and finally, down to 6.5% in 2017.
While these figures show housing across the country continues to enjoy average price growth, it’s far slower than the boom years of 2012-13.
These trends represent a market that is widely seen as enjoying standard ‘buyer’s market’ conditions.

How Do You Spot A Buyer’s Market?

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With the current trends in Malaysia’s house prices, and general market conditions, it would seem that this is a positive time to buy a house.
But how can you identify signs of a good time to buy property?

1) Volume Of Transactions:

The National Property Information Centre compiles figures for Malaysia’s property market.
Looking at a single point in time isn’t a good indication, but comparing property transaction volume and value over the last few years should indicate the direction the property market is moving.

2) Housing Price Index:

NAPIC’s Housing Price Index gives a good analysis of changing market conditions. Take a look at the latest figures released on the NAPIC website to see what insight they might offer.

3) Professional Analysis:

Real estate agents and property experts often collaborate with newspapers and media companies to offer their own insight on current market conditions.
Keep an eye on the property news to see how expert opinion can help you understand the market.

Combining Positive Conditions With Positive Incentives

Another great way to get a feel for the property market is by understanding the incentives and opportunities available to homebuyers.
In times of a slow market, government often tries to kick-start positive market conditions with a range of tax and financial incentives.
Developers also often tend to throw in valuable rebates or financial incentives to help stir demand. Here are a few examples to look out for.

1) First Buyer Schemes:

Schemes like the My First Home Scheme are a sign that the government is trying to provide a spark to a slowing market.
While the on-going efforts to encourage and support first time buyers is a clear national priority, the sudden introduction of similar schemes can indicate it’s a good time to buy.

2) Financial Relief/Tax Relief:

Changes to reduce or freeze stamp duty can be a good indication that market conditions are slowing.
Not only does that provide an insight into whether it’s a buyer’s market, it means buyers can enjoy a financial saving on their purchase.

3) Property Market Campaigns:

The Home Ownership Campaign (HOC) is an initiative designed to combine stamp duty relief with developer promotions, and purposefully targeted to stimulate a growth in property purchases. Introduction of these types of schemes often indicate good market conditions for buyers.

4) Developer Initiatives:

Alongside joint private-public initiatives like the Home Ownership Campaign, keep your eyes open for targeted incentives and financial packages from individual developers.
When it comes down to it, the overall market conditions can help provide the right environment to buy, but whether that’s the right decision is often down to your own unique circumstances.
A buyer’s market may present a positive opportunity for some, but if you’re looking to sell a home to finance your next purchase, you should weigh up the benefits of lower prices to buy against the potential of a lower price for your sale.
Understanding current market conditions is an important part of making an informed choice, but always weigh up how your finances and life goals align with your ultimate decision.
If the signs are good, it might well be time to take that exciting step towards buying your next home.
Looking to find your perfect property now that it seems Malaysia is headed towards a buyer’s market? Then head on over to check out the thousands of homes just waiting for a new owner’s love! 😛
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