PETALING JAYA: The Malaysian real estate industry expects a strong market recovery in 2022, while forecasting national price growth of 10.6% through the third quarter of 2022, despite a -4.8% fall over the next 12 months, according to the new Property Survey and Index Q3 2020 by proptech group Juwai IQI.
The industry has forecast that the states with the strongest forecast price growth over the next two years are Penang and Perak, with price growth of 15.9% and 14.3%, respectively. Kuala Lumpur and Selangor are predicted to have the lowest forecast price growth over the next two years, with a lower but still impressive 8.5%. This is despite the National Price Expectations Index showing a downwards trend with a -4.8% fall over the next 12 months, before climbing again to post a cumulative growth rate of 10.6% over the next two years.
On a nationwide basis, rents are expected to drop 3.8% over the next 12 months, before recovering to post 7% growth through Q3 2022. Perak is projected to see one of the highest increases in residential rents over the next two years at 16.7%. Kuala Lumpur and Selangor are projected to see a 4.4% increase in residential rates.
The share of new home transactions attributed to local first-time buyers increased by 4 percentage points to 34% this quarter, while the foreign buyer share fell by -7 percentage points to 14%. Local upgrading buyers and local investors maintained their shares at near equal levels of approximately 25%.
First-time buyers have claimed the largest share of the market in Sabah, where they account for 39% of transactions. In Johor and Sarawak, first-time buyers account for 36% of transactions. Local investors take the largest market share in Perak, where they account for 36% of purchases. Foreign buyers are most visible in Penang and Johor, accounting for 17% of transactions in both places.
Perak, Johor, and Sarawak are the states where the industry has the highest expectations for growth in local investor transactions. In Perak, 78% of respondents expect local investors to complete more transactions in the year to come. In Johor and Sarawak, the corresponding numbers are 69% and 65%, respectively.
A total of 344 Malaysian real estate agent panelists participated in the survey online between June 16 and Aug 10, 2020.
Juwai IQI executive director Kashif Ansari said Covid-19 and the resultant economic slowdown has had a significant impact on the real estate industry’s outlook for residential prices over the next 12 months. The survey findings also show that the real estate industry believes the market will recover. Higher price growth and rental yields are projected.
“The fact that first-time local buyers have increased their share in transactions demonstrates the need for homeownership. This also shows that the government’s stimulus measures meant to support this group have been effective. The government has made it easier for first-time buyers to acquire their first home with the reintroduction of the Home Ownership Campaign.
“The survey findings reveal that the appetite for property is resilient despite Coronavirus-related restrictions. Recovery and a return to growth are coming by 2022.”