The demand for subsale terrace houses, especially in the suburbs, rose 29% year-on-year (y-o-y) in the first half of 2021 (H1 2021), with the average asking price improving 1.6% thanks to the new normal practice of work-from-home amid the Covid-19 pandemic, according to iProperty.com.my.
In contrast, the property portal said the asking price for condominiums in the secondary property market was down 0.9% y-o-y while subsale serviced residences fell 1.1% during the period.
This was despite the higher demand of 5.2% y-o-y and 6.8% y-o-y, respectively, mainly due to the high number of unsold units and with most sellers settling for lower prices in order to attract buyers, it said.
Overall, data from iProperty.com.my showed that consumer sentiment for subsale residential property grew 19.2% y-o-y in H1 2021 from a contraction of 2.5% y-o-y in the same period last year.
The portal’s general manager for customer data solutions and quality, Premendran Pathmanathan, said the Covid-19 pandemic did not adversely affect the subsale residential property segment as it did in H1 2020 when demand dropped into the negative region.
“One of the critical factors which supported demand recovery in H1 2021 is that property seekers have warmed up to the idea of conducting their property search journey online, besides online property browsing.
“Following up with property agents virtually is being accepted as the new normal,” he said at the iProperty.com.my H1 2021 property demand analytics on the subsale residential market virtual conference here today.
According to an iProperty.com.my statement, the double-digit demand growth in H1 2021 did not only represent an increase in property interest as homebuyers also took follow-through actions with many applying for home loans in H1 2021, an indication of genuine purchasing interest.
“Based on Bank Negara Malaysia’s (BNM) monthly loan application data, the value of home loan applications grew 86% y-o-y to RM179.4 billion in H1 2021 from RM96.4 billion in H1 2020, the value of loans approved also increased by 92.6% y-o-y in the same period too.
“With the overnight policy rate (OPR) at a record low of 1.75%, many consumers are searching for property bargains in a low interest rate environment,” it said.
On the average asking price outlook in the subsale property market, Premendran expects prices in high-rise properties to continue dropping as owners could not command higher prices due to the property overhang.
“As for terrace houses, particularly in mature areas such as Damansara, Taman Tun Dr Ismail, Damansara Heights, Petaling Jaya and Subang Jaya, you don’t see a drop in asking prices, hence, this segment will either stay flat or see modest growth moving forward,” he said.
Asked if the new Malaysia My Second Home Programme (MM2H), which now has stricter criteria, would weigh on the property sector, Premendran said although there is still a lack of data over the issue, iProperty.com.my did see growth in foreign demand when the programme was temporarily suspended since August last year.
“In terms of the number of visitors who were checking on our website, we noticed that visitors from Singapore grew 15% and those from Indonesia surged 100% even when MM2H was suspended for a period of time. Foreign demand was still growing, and the suspension did not dampen foreign visits to our site,” he noted.
The government had temporarily suspended MM2H in August 2020 after it decided not to allow foreigners into Malaysia following the outbreak of Covid-19. However, the programme will be reactivated in October this year with stricter conditions.
On the overall subsale residential property outlook, Premendran said if the country could achieve herd immunity by end-2021, along with the reopening of the economy and borders, there is no doubt that sentiment would improve by end-2022.
“With the current lower interest rate environment, loan moratorium, coupled with the stimulus packages which help the affected rakyat and keep us afloat, we hope these measures will hold up the property market until the economy reopens again,” he said. -BERNAMA