Price Trends in Developer vs. Subsale: Ultimate Factor in Home Buying?
The issue of incremental house pricing in Malaysia and ability for home buyers to own homes have become a frequent topic of discussion. Generally other than home prices as the main factor, household income, inflation and bank policies on loan extension have also affected home buyers in their decision making process.
According to market theory - the prices are determined based on the mechanism of supply and demand between a willing buyer and seller in an open market. Buyers in general will have the option of purchasing directly from the developer or through secondary market homes.
According to NAPIC, residential transaction data for the period of 2019-2024 involves generally a range and types of residences but let us drill down to both Terrace Houses vs High-Rise Units.
Terrace houses, the most popular choice among buyers, as it demonstrated stable pricing and nearly equal value in both markets. Price growth was more significant in second-hand terrace houses, particularly in 2021, with a growth rate of 12.5%.
High-rise units showed that prices of developer-built units were higher than second-hand homes, with the highest growth recorded in 2020 (20.1%), while price growth for second-hand high-rise units was minimal. This indicates a lack of demand for second-hand condominiums, flats, or apartments.
The average price of terrace houses in both markets is nearly the same. For high-rise units price increases for developer-built homes were significantly higher.
The price increase for second-hand condominiums, flats, or apartments was minimal, likely due to an oversupply of these units in the market, which provides buyers with options to choose newer developer-built homes that offer better facilities and more attractive incentives.
From the 2 types above, the majority of property transactions in the country were contributed by the secondary market (sub-sales homes), with a percentage ranging from 72.0% to 85.3% during the study period.
Homes in strategic, well-established areas with complete amenities often become the top choice for buyers, surpassing properties in the primary market. While price is a key consideration—being one of the most significant financial commitments in life—other factors play a crucial role. The potential for future development, surrounding infrastructure, access to commercial hubs, proximity to schools, and nearness to family and workplaces all influence the decision. Together, these elements shape the appeal of a home, making it more than just a place to live but a smart and practical investment for the future.
Source: NAPIC
