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Malaysia – Asking prices for local residential properties set to rise: Consultants
PETALING JAYA: Asking prices for residential properties in Malaysia are expected to increase due to the resilient market as owners anticipate an improvement in line with economic recovery, according to Nawawi Tie Leung Property Consultants’ research report.
It foresees optimism in the market as Malaysia enters the Covid-19 endemic phase, according to report on the state of the real estate sector in the first quarter of 2022 (Q1’22).
In the first three months of the year, asking prices and asking rentals of high-end condominium units registered increases of 3.1% (RM960) and 1.5% (RM3.18) on a quarter-on-quarter basis, respectively.
“Projects completed in the (Kuala Lumpur) city centre during the quarter are R8 Residensi in Ampang Hilir (26 units), Eaton Residence in Jalan Kia Peng (632 units), and 10 Stonor in Persiaran Stonor (364 units),” Nawawi Tie Research said in its Real Estate Times April 2022.
To cater to the housing needs of the mass market and address the affordability issue, especially for first-home buyers, it said, the National Affordable Housing Council has set a new direction for the People’s Housing Programme to achieve “One Family One House” goal.
Meanwhile, the Ministry of Housing and Local Government (KPKT) has introduced the Home Ownership Programme. Additionally, the government has introduced the RM2 billion Housing Credit Guarantee Scheme as an alternative financing programme to assist first-time house buyers, particularly those who could not provide a consistent payslip. Among potential buyers who will benefit from this scheme are gig workers, farmers, and fishermen.
In order to protect homeowners’ and tenants’ rights, KPKT has tabled the Residential Tenancies Act.
The pandemic and rising costs of materials have contributed to the slowdown in the completion of construction activities in the past few years.
The Building Materials Cost Index has increased between 0.3% and 3.1% in Peninsular Malaysia. To assist property developers in curbing the price increase, the government has introduced Variation of Price for contractual works (extended to June 30, 2022) to ensure ongoing projects will be completed as scheduled. Besides that, developers have been constantly conducting value engineering, including lowering their profit margin, to remain competitive in the market.
On investments, the report observed increasing market activity as Malaysia continues its slow recovery post-Covid-19 pandemic.
“We expect the opening of international borders starting in April will improve overall sentiment in the market. Developers continue to seek strategic lands, an opportune time due to the soft market and greater availability of lands that would not be in the market otherwise,” it said, adding that Nawawi Tie Research anticipates sluggish market recovery this year with continued political uncertainty.
Commenting on the office market, the report said the newly approved MRT3 Circle Line project – with 31 stations and its integration with all major rail lines in Klang Valley – will be a breath of fresh air to the property market, as it will broaden public transport connectivity within Klang Valley.
“However, we do not foresee any significant impact on the office market in the short and medium term because the construction will spread over 10 years. With more workers returning to the office, office occupiers are more confident in planning their future expansion or relocations. Hence, we expect more leasing enquiries and activities in the coming quarter.”
With the opening of international borders from April 1, Nawawi Tie Research expects more enquiries and site visits from multinational companies. “As the supply of quality and sustainable office space is limited, competition will persist, especially in the city centre, limiting office rental growth.”
Source: https://www.thesundaily.my/home/asking-prices-for-local-residential-properties-set-to-rise-consultants-CX9099631