Despite the passive property outlook predicted for the year, aspiring homeowners still seem to be hungry for a ‘slice’ of the real estate ‘pie’, where buying intentions belong to both first-time homebuyers as well as those wanting to upgrade.
The strong purchasing sentiment expressed during the PropertyGuru Sentiment Survey 2H2016 saw close to 6 out of 10 participants looking into obtaining properties within the first half of this year.
The survey recorded 56 percent respondents wanting to buy either newly developed/ launched or resale properties.
33 percent favoured buying brand new properties while 11 percent were eying resale houses only.
Respondents also stated their desired location, with Klang Valley emerging as the top locale to buy into, scoring a 70 percent interest.
The outskirts of Selangor came in second with 29 percent, followed by 19 percent in Penang and 14 percent in Johor.
From the survey, we noticed a strong buying interest amongst buyers from the (M40) middle-income bracket given the type of properties that were sought after.
Compared to H2 2015’s Sentiment Survey there was a significant increase in PI scores for Flats, Condominiums and Terrace House providing further evidence of robust interest.
So what do serious and would-be buyers want to purchase in the coming months?
Determined buyers
Findings from the survey saw a preference for landed properties particularly terrace houses, leading the list at 32 percent.
Condominiums came in second with 27 percent, semi-detached at 20 percent and flats/apartments were 16 percent.
The upper-class buying interest saw 11 percent of respondents looking at purchasing land and bungalows at 8 percent.
Now that we understand the needs of the market, is there an adequate supply to match the demands?
According to the National Property Information Centre (Napic)’s latest Property Stock Report 2016, 826,687 properties will be making its way into the market (as of the fourth quarter of 2016).
Amongst the states, Selangor, Johor and Penang recorded the highest number of supply with 397,341 units entering the market.
Additionally, according to the report, landed properties dominated the market with 509,568 units, with terrace houses hitting the mark at 325,270.
Stratified properties, on the other hand, had 320,119 units, dominated by condominiums at 204,518.
Therefore, supply has increased by 8.2 percent compared to 2015, giving buyers even more opportunities.
Still in the pipeline
Findings from the PropertyGuru Sentiment Survey also discovered that 43 percent respondents who might buy a property in the next coming months were mainly looking at owning a condo unit.
Terrace houses came in second at 38 percent followed by apartment/flat and ‘semi-ds’, both at 29 percent.
Taking into consideration the niche markets of bungalows and land, there was a 12 percent and 17 percent possible intent of purchase among these respondents.
Napic’s report also showed that 120,089 worth of properties obtained building plan approvals in Q4 2016.
Selangor took the lead with an incoming supply of 20,752 units followed by Kuala Lumpur at 20,649 units and Perak at 18,553 units.
The report also noted that there was an almost balanced number of stratified and landed properties at 56,791 units and 63,298 units respectively.
There will be an additional 48,702 condominiums planned for this year, of which 20,953 units will be seen in Kuala Lumpur.
Meanwhile, 46,681 terrace houses have obtained approvals this year with 8,202 units taking shape in Perak.
Does the demand and supply match?
While the above mention statistics seem very convincing, there is a grey area that is yet to be tackled regarding buyers’ eligibility and property affordability.
As observed, the majority of respondents represent the M40 bracket and evidently, there is a demand but supply mismatch for affordable housing.
Meanwhile, as reported in a local daily, the Director-General of the Valuation & Property Services Department (JPPH) Dr Rahah Ismail said that the national housing supply of 6.4 million is adequate. This includes existing supply, houses in the pipeline and planned supply.
Real Estate and Housing Developers’ Association Malaysia (Rehda)’s president FD Iskandar said while this is true in certain locations, other places like the Klang Valley will need more houses as the population is projected to grow from seven million now to 10 million by 2020.
He said more houses will be needed in the Klang Valley as more people move interstate due to education and job opportunities.
He insists that the housing market needs an additional 100,000 to 110,000 new units per year nationwide to meet the needs of the population.
“About 63 percent of Malaysians are below the age of 35 and they are the ones looking to buy houses. We don’t have enough houses,” he added.
Food for thought?
Rehda continued that it is crucial to formulate a holistic planning and implementation system between the Government and private sector to provide sufficient quality housing that works for low- and middle-income households, especially.
“Solely because Malaysia is undoubtedly experiencing a shortage of supply of affordable and quality houses particularly in major urban areas.
And if left unchecked, this trend may lead to deeper imbalances in the property market,” it stressed.
Whether it’s a first-time or move-up buyer, purchasing a home is a major life decision and Malaysians are recognising that the importance of maximising can only be viewed as a long-term investment.
For more information on new homes, check out PropertyGuru’s New Property Launches and Project Reviews.
