THE property market is expected to remain soft this year despite the cautious optimism towards the nation’s projected gradual economic recovery.
According to the National Property Information Centre, (NAPIC), the property market’s performance recorded a sharp decline in the first half of 2020 (1H 2020), in consonance with the Malaysian economic performance, which contracted by 17.1% in the second quarter of 2020 (2Q 2020), with 1Q 2020 at 0.7%.
However, the pace of improvement will be dependent on both domestic and external factors such as political stability, global oil and commodity prices, as well as any further developments related to the pandemic.
For the 1H 2020, the property sector recorded 115,476 transactions worth RM46.94 bil, a decrease by 27.9% in volume and 31.5% in value compared with 1H 2019, which recorded 160,165 transactions worth RM68.53 bil.
While in 3Q 2020, NAPIC said the volume of transactions and yearly change recorded an improvement with 89,245 units from 83,085 units in 3Q 2019, with 7.4% from 5.5% in the same quarter last year, respectively.
This was led by the residential sub-sector, followed by agriculture, development land and others, commercial and industrial.
Despite that, the total transaction value for 3Q 2020 declined -2.4% from 4.6% year-on-year (yoy) with RM33.78 bil from RM34.62 bil previously.
Coupled with the Government’s reintroduced Home Ownership Campaign (HOC) under Penjana, more first-time buyers will be attracted to enter the market for 2H 2020, said market players.
With the initiative, buyers would alleviate the current oversupply of unsold properties in the market.
In addition, Bank Negara Malaysia’s (BNM) decision to maintain the overnight policy rate (OPR) at 1.75% also plays a part in attracting house seekers, as a low interest rate would give a head start in interest rate savings.
Meanwhile, based on PropertyGuru Malaysia’s Property Market Index, the property market is still dealing with the effects of the COVID-19 pandemic in 3Q 2020, causing the asking prices to move downward, namely for Kuala Lumpur, Selangor, Penang and Johor.
The property site said overall asking prices for property in Malaysia dropped by 1.34% this quarter, in contrast to the 0.38% increase registered in 2Q 2020 and 0.63% increase in 1Q 2020.
On a different note, to resolve the issue of unsold completed residential units and ensure a more organised property development in the country, the Housing and Local Government Ministry is developing the Housing Integrated Data System, which is expected to be ready next year.
Minister Zuraida Kamaruddin has also said that the ministry has proposed a ‘vacancy tax’ to be introduced and imposed next year, to developers who fail to clear their outstanding residential stock.
Long-standing problem
In 2018, Napic data showed that 83% of the total unsold residential units were in the above RM250,000 price category, with Johor holding the title for having the largest share of total unsold residential property at 27%, followed by Selangor (21%) and Kuala Lumpur (14%).
Ultimately, market observers pointed out that lack of information being made available to developers as the prime culprit for the asymmetry that plagued the property industry at the time.
While data exists from a multitude of sources, not many can afford to fork out the hundreds of thousands of ringgit required to purchase the data needed to make good and informed decisions.
A property observer told FocusM that Napic charges 60 sen per raw data (at the time), for data on a house transaction.
He said this translates to huge amounts to be forked out to obtain sufficient data to analyse and determine trends in real estate development decisions.
This, he claimed, was beyond the affordability of most small to medium organisations in the country.
“The problem we face in the property market is that the relevant bodies having the information appear to be making money from the information gap in the market,” he opined.
Malaysia lacks a database that captures the supply and demand of housing which incorporates information such as household income, characteristics and preferences.
This stands in the way of ensuring the supply of homes meet the requirements of demand. – Dec 10, 2020
