Boom amid gloom | Malaysian Institute of Estate Agents

Boom amid gloom


PETALING JAYA: Certain segments of the property market are seeing a boom even as other industries are experiencing a downturn due to the economic impact of the Covid-19 pandemic.

Property market players are reporting a rise in sales of up to 50% since March. Surprisingly, prices remain low despite the fact that more properties – both residential and commercial – are changing hands.

Real estate negotiator Azima Rahman attributes the more intense market movement to government incentives that have put additional cash in the people’s pockets, as well as lowered interest rates.

“The Covid outbreak has left many industries barely surviving, and even disrupted the property market,” she told theSun yesterday.

“But for many Malaysians, especially first-time buyers, the lower interest rate has been a silver lining.”

Azima said houses are becoming more affordable now and there has been renewed interest in property investment, especially among Malaysians.

“We managed to sell a whole block (of apartments) in just one month. They sold like hot cakes.”

She said the lower prices have also attracted a lot of interest from foreign investors, especially Arabs and China nationals.

However, those who are selling are doing so at a loss, according to Chester Properties Sdn Bhd senior negotiator Mohd Shariman Mohd Shaari Tan.

He said about 80% of property owners are even prepared to sell at below market prices.

“There is a condominium unit in Shah Alam that is going for only RM300,000. Before the Covid outbreak, the unit could have fetched RM400,000 to RM480,000,” he said.

“Homeowners are desperate to sell their properties rather than hold on to them on the assumption that there will be even more units in the market once he moratorium on loan repayments is lifted at the end of this month,” he said, adding that if that happens, prices are likely to drop even further.

He said some homeowners who have lost their jobs are desperate to sell their properties because they need cash to survive.

Tan and Azima both said that now is a good time to buy, especially for first-time buyers, “but not everyone can afford to buy from the developers because they generally target those in the M40 group”.

Tan said that only “one or two” out of 10 people are now willing to invest in new properties for fear of another big wave of Covid-19.

“This crisis has made people aware of their spending habits as it may take years for us to bounce back. Everyone will start using their emergency savings during this period.

On the other hand, those who have extra cash to spend will see the crisis as an opportunity as they can get a good price of property between 30% and 50% lower than the market price,“ he said.

However, the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia president Michael Kong said there is still apprehension among Malaysians on investing in properties.

“People are still worried about job security and pay cuts,” he pointed out.

“The country is also falling way behind in terms of enticing foreigners to invest more in our properties. But by liberalising foreign investments into the Malaysian real estate market, the country is able to make the local market more robust, vibrant and competitive,” he said.

“It would also help to absorb and reduce the current overhang situation. This will free up our resources in real estate and redirect it to other productive areas of the economy,” he added.