Trends in residential property transactions in H1 2021

Only 24% of property purchases in the first half of 2021 were for high-rise buildings, as opposed to 30% in H1 2020 and 28% in H1 2019.

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When the first movement control order (MCO) came into effect in early 2020, property transaction volumes dropped by 41.65% compared with the same pre-pandemic period the year before.

The number of transactions then increased by 51.33% in the second half of that year, owing to pent-up demand and the easing of economic activity.

Then, with the return of the MCO in January last year, the volume of property transactions in the first half of 2021 (H1 2021) dropped 30.69% from the second half of 2020.

Despite the uncertainties brought about by Covid-19, most of the top 10 transacted locations for residential properties have remained the same as the pre-pandemic period, albeit in different rankings.

Ipoh emerged as the most transacted area in the country in the first half of 2021. (Property Advisor pic)

Skudai remains the top transacted area in Johor, while Penang’s cities are absent from the list despite being a key state often mentioned in market reports.

Notably, five – including Cheras – of the top 10 transacted residential areas in H1 2021 are in Selangor, making it the most transacted state in Malaysia.

Selangor accounted for 26% of residential property transactions in the country for that period, followed by Johor (14.4%) and Kedah (17.7%), respectively.

Buyer preferences and profiles

Only 24% of property purchases in the first half of 2021 were for high-rise buildings, as opposed to 30% in H1 2020 and 28% in H1 2019.

The decline in high-rise transactions suggests the prolonged effects of the MCO and work-from-home policies saw more buyers opting for landed properties as space and health concerns took precedence.

That said, more transaction data for the rest of 2021 is required before definitive conclusions can be made. If such preferences are proven, then the next question is whether this inclination will remain in the endemic era.

There was a big decrease in searches for apartments, condos and serviced residences, and an uptick in landed-property queries on PropertyGuru’s website amid the pandemic. (Property Advisor pic)

The purchase of larger, more expensive properties has driven up median transacted prices despite the decline in volume of transactions. Overall, median prices for property purchases rose to RM347,759 in H1 2021 from RM310,000 in H2 2020.

Some 62% of property purchases were by First Home Buyers with a median price of RM347,759. The remaining 38% were by investors – those who own more than one property – with a median price of RM400,000, though the data is unable to determine if these purchases were for investment or personal use.

As much as 92% of purchases in H1 2021 were subsale properties, as opposed to new projects in the primary market. In contrast, 30% of purchases in H1 2020 and 34% in H1 2019 were in the primary market.

The decrease in purchases of new projects in H1 2021 and 2020 indicates buyers were more inclined to purchase subsale properties despite movement and work restrictions.

The data for the rest of 2021 is still being gathered and is expected to be available by the middle of this year. More insights for the whole year should shed light on the impact of the third MCO in the second half of 2021, and the influence of the Home Ownership Campaign that ended on Dec 31.

This article was written by Vigneswar Rajasurian of PropertyAdvisor.my, Malaysia’s most comprehensive source of property data, property analytics and insights.

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