Trends In the Housing Market

An Insight into the Current Malaysian Real Estate Trend 2022

Covid 19 rocked the property industry!

The pandemic of the twenty-first century The Coronavirus (Covid-19) has undoubtedly crippled the human lives across the globe in just a span of two years. One specific area experiencing the brunt of this unprecedented catastrophe is the housing market.

Malaysia's property market sector did not thrive well compared to pre-pandemic levels, creating a general trend of cautious pause to see how the pandemic would play out, prior to spending any money on hard assets - real estate.

The economy is slowly picking up after a two-year slumber due to the COVID-19 pandemic. With the hope of “normalizing” back to pre-pandemic life and “reopening” measures economic growth and consumer spending has followed a positive trajectory. The housing market remains challenging and competitive while the new trend sees a more optimistic consumer sentiment fueling a sudden interest in home buying.

INTRODUCTION OF VARIOUS GOVERNMENT HOME BUYING INCENTIVES

Malaysia’s housing market needs to be seen within the more general macrotrends. To begin with, the prices are not going to decline in 2022. The various forecasts from experts show that 2022 will remain a sellers' housing market, and home values are expected to increase on a year-over-year basis. The government introduced multiple temporary measures to combat the impact of the pandemic:

 i. Lowered the threshold of high-rise property prices in urban areas for foreign ownership from RM 1 million to RM600,000 only to unsold completed properties.

ii. Rent-to-Own financing scheme to assist first-time prospective buyers of homes below RM500,000 through a five-year rent agreement.

iii. A six-month loan payment moratorium extension and repayment flexibility were also offered to selected borrowers.

iv. The launch of the Home Ownership Campaign- stamp duty exemption for first-time house buyer.

With the end of these measures, consumers have called for concerted efforts by the government to bridge the affordability gap and challenges to achieve homeownership.

COVID 19 CATALYSES REMARKABLE TRANFORMATION ON CONSUMER PURCHASING TREND

With the emergence of inflation just as the economy is beginning to recover from the pandemic, PropertyGuru believes that more Malaysians desires to invest in real estate.

More than 55 percent of Malaysians are contemplating residences on the outskirts of the city when purchasing for their personal stay - top reasons cited for this consideration were better prices, tranquil environments, quieter and larger-sized residences. The pandemic further fuelled the remote working trend with growing preference for moving to the suburbs.

The top 3 measures Malaysians expect by the government:

i. Reduce Real Property Gain Tax (RPGT)

ii. Reduce interest rates further on home loans

iii. Extend Home Ownership Campaign (HOC) 2021 subsale properties

The pandemic’s effect on Malaysians shows an active housing market and an increased demand may be an indicator of positive consumer sentiment- increasing desire on the importance of home ownership. Nevertheless, it remains a challenge and concern on the affordability to own a property amid rising inflation. Consumers will have to wait patiently for Budget 2023 on October 7, 2022 to see the government plans to tackle the slowing global economy post Covid 19 pandemic.