The year-on-year (y-o-y) demand for terrace houses rose by a “significant” 14.1% in the first half of 2021, marking a shift from H1 2020 when condominiums were the most in-demand residential rental property, a property portal said.
The demand for serviced residences also rose by 8%, iProperty.com.my said, contributing to a residential rental property demand y-o-y growth of 1.9% in H1 2021 from a contraction of 5.6% in the same period last year.
Premendran Pathmanathan, iProperty general manager for customer data solutions and quality, said the pandemic started the trend of property seekers looking for bigger living spaces.
As a result, terrace houses became the most popular property type in the first six months of this year.
He said H1 2021 also favoured tenants as renting made more financial sense due to a lower monthly commitment compared to buying the property, especially in times of high unemployment.
“Indeed, many landlords are absorbing some of the income shocks and are pricing down their rental units as they compete to attract a limited pool of financially stable tenants,” he said during the iProperty conference on H1 2021 portal demand analytics (residential rental market) today.
Premendran said that on a positive note, the high number of vaccinations under the national Covid-19 vaccination programme also served as a confidence booster for the property market.
“As we transition to an endemic phase by the end of October, we hope the property market will continue to recover for the remainder of the year and going into 2022,” he said.
A statement by iProperty.com Malaysia Sdn Bhd said demand for residential rental properties in city centres began to build up in H1 2021 as lockdown restrictions were relaxed and various economic activities resumed.
“In particular, some notable business and residential hubs in Kuala Lumpur and Penang have experienced double-digit y-o-y demand growth,” it said.
“These areas include Mont Kiara, Mid Valley City and Kuala Lumpur City Centre in Kuala Lumpur, and Pulau Tikus, George Town and Bukit Mertajam in Penang.”
On the flip side, it said, the statistics department reported an unemployment rate of 4.8% in June, following four consecutive months of lower unemployment figures. The rate remained at 4.8% in July.
“With certain demographic groups facing financial constraints, some landlords will continue to face challenges finding tenants for their properties,” it said, adding that rental yields across all building types had dipped.
The portal said the pandemic supported a tenant’s market, putting renters in a good position to negotiate rental prices.
“This trend continued in H1 2021 where the drop in asking rental prices was higher than the drop in asking sale prices, thus reducing the rental yields,” it said.
Rental yield for terraced houses dropped to 2.9% in the period from 3.3% in H1 2020.
Meanwhile, the rental yield movement for condominiums and serviced residences declined by 0.3% and 0.2% respectively, whereas yield for apartments stayed at 4.4%. -Bernama