FOR IMMEDIATE RELEASE
- The COVID-19 pandemic has accelerated the property seeking journey shift from offline to online.
- Interest in terrace houses remains the highest with +29% YoY demand increase and +1.6% in asking prices.
- The YoY demand for high-rise homes has also improved slightly at +5%. However, asking prices have reduced mainly due to most sellers settling for lower prices in order to attract buyers.
KUALA LUMPUR, 24 AUGUST 2021 — iProperty.com.my today revealed that Malaysia’s subsale residential property demand experienced positive growth in H1 2021, rising to +19.2% from -2.5% in H1 2020. Both unique visits and property listing supply on iProperty.com.my, consisting of terrace houses, condominiums, service residences and apartments, have increased in H1 2021 with visits outweighing the increase in listing supply.
The announcement was made during an online virtual conference of the bi-annual iProperty.com.my H1 2021 Property Demand Analytics – this publication showcases key demand data and insights into the subsale residential market in Malaysia. This year’s edition tracks the asking prices of subsale residential property on iProperty.com.my, replacing transacted prices used in previous editions. Asking prices are information provided by the respective property sellers and this information provides better insights from the sellers’ perspectives.
Commenting on the analysis, Premendran Pathmanathan, General Manager for Customer Data Solutions & Quality, iProperty.com.my said, “It is encouraging to see recovery for the subsale residential market in H1 2021. The COVID-19 pandemic did not adversely affect this segment as it did in the first half of last year where the H1 2020 demand figure dropped into the negative region. One of the critical factors which supported demand recovery in H1 2021 is that property seekers have warmed up to the idea of conducting their property search journey online – besides online property browsing, following up with property agents virtually is being accepted as the new normal.
Moreover, the Home Ownership Campaign (HOC) extension until December 2021 serves as a motivation too – the various HOC property deals have a spillover effect on the subsale residential segment as property seekers who are conducting due diligence will continue to browse subsale homes in the same area/vicinity to compare property prices.
Increase in home loan applications and positive demand for all property types
The double-digit demand growth does not only represent an increase in property interest. Homebuyers also took follow-through actions as many applied for home loans in H1 2021, expressing genuine purchasing interest. Based on Bank Negara Malaysia’s (BNM) monthly loan application data, the value of home loan applications grew +86% year-on-year (YoY) from RM96.4 billion in H1 2020 to RM179.4 billion in H1 2021. The value of loans approved has increased by +92.6% YoY in the same period too. With the Overnight Policy Rate (OPR) at a record low of 1.75%, many consumers are searching for property bargains in a low interest rate environment.
Interest in terrace houses remains the highest in Malaysia with a +29% YoY increase, this has allowed sellers to maintain their high asking prices at +1.6%. The demand for condominiums, apartments and serviced residences is positive albeit lower, with a +5.2%, +11.7%, and +6.8% YoY increase, respectively. However, the asking prices of high-rise homes in all major states have reduced due to a high number of unsold units and as a means for sellers to attract buyers.
Premendran continues, “The upward trend of approved home loan applications is promising. It shows that financially abled Malaysians are still interested in purchasing homes either for their own stay or for investment purposes. However, positive figures aside, aspiring homeowners should plan before committing to long-term borrowing, as interest rates might not stay low for long. A return to pre-pandemic interest rates could result in higher monthly repayments in the future. As our country ramps up its vaccination program and moves towards herd immunity, we hope the economy and by extension, the property market will continue to recover in the second half of the year.”
Kuala Lumpur’s affluent areas hold steady
Kuala Lumpur posted an +8.1% growth in subsale residential demand, compared to +0.3% in H1 2020. The asking prices in affluent areas such as Damansara Heights, Sri Hartamas, Mont Kiara and Desa Parkcity are more likely to be higher as these are prime areas for wealthy property seekers. However, property sellers in other parts of the capital city are lowering their asking prices, signalling a slight decline in holding power.
The demand for terrace houses in Kuala Lumpur is robust at +27.1% with asking prices growing by +2.9%. Bangsar saw strong demand for terrace houses priced between RM1.5 million to RM2 million (1,500 sq ft to 2,000 sq ft). In contrast, Taman Tun Dr Ismail attracted visitors interested in high-rise units priced between RM1 million to RM1.5 million (1,500 sq ft – 2,000 sq ft).
Demand remains high for suburban areas in Selangor
Selangor’s subsale residential property demand grew by +17.6% in H1 2021, mainly driven by the +20.7% YoY demand increase for terrace houses (+3.5% for asking prices). The state’s suburban areas remain the top choice seeing that the working from home trend is here to stay and consumers are interested in affordable, spacious properties. Puncak Alam and Dengkil saw high demand for terrace houses priced between RM500,000 to RM750,000 (1,500 sq ft to 2,000 sq ft), whereas property interest in Semenyih and Sungai Long were for spacious terrace houses (2,000 sq ft to 3,000 sq ft).
Setia Alam experienced a +41% demand growth, mainly contributed by the workers of a top rubber manufacturing factory looking for affordable high-rise accommodation in the area as well as property seekers looking for more premium landed homes (above RM 1 million).
Penang benefitted from rising demand for properties around industrial hubs
Compared to H1 2020, Penang’s subsale residential property demand growth has recovered from -6.5% to +23% YoY due to interest in industrial areas such as Batu Kawan and Bayan Lepas, which host many tech manufacturing companies. On the mainland, lower-priced landed properties commanded higher asking prices between RM300,000 to RM500,000. These areas include Juru, Nibong Tebal, and Seberang Jaya.
Meanwhile, high-rise properties priced between RM300,000 to RM500,000 (700 sq ft to 1,000 sq ft) are rising in popularity on the island. Interestingly, Bukit Jambul saw a surge in visitors for condominiums priced above RM1 million.
Strong local demand reinvigorates Johors subsale residential market
In H1 2021, the Johor subsale residential property market experienced positive growth of +36.5% from -22.8% in H1 2020. The increase came mainly from local property seekers as foreign demands, especially from Singapore, remain low with international borders still closed. Landed homes are still the preferred property type in Johor, with terrace houses priced between RM300,000 to RM500,000 (1,500 sq ft to 2,000 sq ft) being the top choice.
Batu Pahat and Pasir Gudang became the top two most in-demand areas in Johor. Pasir Gudang experienced a +9.61% growth in asking price due to its reputation as one of Johor’s industrial hubs. Meanwhile, asking prices in Iskandar Puteri, Johor Bahru and Gelang Patah have declined. Nevertheless, there was considerable interest for spacious landed properties in Iskandar Puteri priced up to RM1 million (>2,000 sq ft).
You can download a copy of the iProperty.com.my H1 2021 Portal Demand Analytics (Subsale Residential Market) here.
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About iProperty.com.my
iProperty.com.my is headquartered in Kuala Lumpur, Malaysia and employs over 200 employees. iProperty.com.my is the market-leading property portal, offering a search experience in both English and Bahasa Malaysia. iProperty.com.my also provides consumer solutions such as LoanCare – a home loan eligibility indicator, News & Lifestyle channel – content to enhance consumers’ property journey, events – to connect property seekers with agents and developers offline, and much more. The company is part of PropertyGuru Group, Southeast Asia’s leading property technology company1.
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1In terms of relative engagement market share based on SimilarWeb data.