HIGH-END apartments dominated by foreign professional tenants are expected to face greater pressure to reduce rents in the third quarter of the year as there is little hope of border of border opening in the near future due to the threat of Covid-19 second wave, SPEEDHOME said citing an internal data.
However, it said residential properties with a rental value less than RM2,000 had basically not changed much.
SPEEDHOME chief executive officer Wong Whei Meng stated that after the movement control order (MCO) ended in the Klang Valley, the platform’s residential rental business returned to normal within one month.
“Houses with rents ranging from RM1,000 to RM2,000 remained very popular and the rental price has in fact not changed much,” he said.
Shedding light on the housing rental scenario, Wong further said that in June and July, the supply and demand for residential housing in Klang Valley were in balance.
“During the loan moratorium period, homeowners were not in a hurry to find tenants, but after August, they began to reduce prices in a rush to find tenants, especially properties with monthly rents higher than RM2000.”
He said, if the rents had not been reduced, it would result in longer vacancy period.
“High-end properties in Klang Valley that were primarily catering towards foreign professionals, were considerably affected by the Covid-19 as some foreign tenants chose to terminate their contracts early and return to their home country,” noted Wong.
In a press statement today, he reckons the monthly rent of this type of property would be reduced by 5% to 15%.
Meanwhile, the supply of residential real estate in Penang, a popular tourist destination, has doubled in the past two months in SPEEDHOME platform.
It was believed that many homestay operators had chosen to change their houses from short-term rentals to long-term to secure a more stable rental income.
This, SPEEDHOME said was in line with the apartment management’s control of short-term rental activities.
According the one-stop residential rental platform, Johor also faced greater pressure to reduce rents, citing the state’s unsold properties as the reason.
Aside from that, the border closure between Malaysia and Singapore which led to many local workers losing their jobs had also caused demand for rentals in the state to drop sharply. The average rent fell by 10% to 20%.
Wong believes, when the loan moratorium ends, landlords will be more willing to accept any type of rental solutions that are in the market.
He remarked, currently the market acceptance of zero-deposit rental model was on the rise and that there were at least four companies that replaced the rental deposit platform with insurance.
Wong went on to say, “Now that the economy is sluggish, many Malaysians are not saving money. Requesting them to pay rental and deposit which is equivalent to their three to four months income, will make it more difficult to find tenants.
“The zero deposit model will accelerate the efficiency of the residential rental market in Malaysia, allowing homeowners and tenants to achieve a win-win situation.” – Oct 2, 2022