Malaysia Property Market Index Q3, 2021 Report
- Q3 2021 Price Index at 87.86 [ QoQ: No change / YoY: -2.16% ]
- Q3 2021 Supply Index at 405.02 [ QoQ: +11.94% / YoY: +34.53% ]
Key take away
- Prices stabilising at current level
- Supply still on the rise (YoY spike of 34.53%)
- Delayed recovery expected
After 16 months of pandemic-disrupted market, it is clear that the prolonged COVID-19 situation has had a direct impact on property transactions. A turnaround for the current environment of depressed prices can only be expected in tandem with reduced infection rates and removed Movement Control Order (MCO) restrictions.
The Supply Index suggest a robust supply growth, note that much of the incoming supply is also due to more homeowners putting their properties on the market to generate better cashflow in this harsh economic climate. an influx of properties for sale could further adversely impact asking prices in the secondary market, going forward.
Furthermore, Malaysia is still coping with a significant overhang of unsold, completed property units in the market, which is a situation that is not expected to be resolved any time in the near future. The latest data from NAPIC indicates that there are currently 27,468 units of residential overhang in Q1 2021, not including SoHos and serviced apartments that fall under the commercial classification. Coupled with the 25,439 overhang units of SoHos and serviced apartments, the overhang totaled at 52,907 units as at Q1 2021, one of the highest levels since 2016.
Government Policies & Macro-economic Factors
National vaccination programme targeting herd immunity target of 80% by late 2021.
A six-month moratorium on bank loan repayments was re-introduced to offer some relief to consumers, while the extension of the Home Ownership Campaign (HOC) and incentives offered under it will keep property interest afloat for a select few who still enjoy sound financial footing.
In July 2021, Bank Negara Malaysia has projected the headline inflation to be averaged closer to the lower bound, of a range between 2.5% and 4.0% for the entirety of 2021, citing uncertainty over the path of the pandemic and potential risks of heightened financial market volatility.
Meanwhile World Bank has lowered its GDP growth projection for Malaysia from 6.0% to 4.5% while Finance Minister is revising current GDP growth projection of 6% to 7.5%
Overall, the outlook on the property sector is expected to be gloomy for the remainder of the year.
Reference: Malaysia Property Market Index Q3 2021 Online Report (PropertyGuru / 27 July 2021)