Potential homebuyers still resisting higher asking prices: PropertyGuru

PETALING JAYA: Potential homebuyers continue to resist higher asking prices amid a challenging economic landscape, according to PropertyGuru Malaysia.

In its Property Market Report Q3 2023, it found that there is a steep downward trend for property enquiries on its website, with the sale demand index declining by 10.2% quarter-on-quarter (q-o-q), which it opined is consistent with Bank Negara Malaysia’s data, whereby home loan applications saw a decrease of 11% q-o-q in June.

It said the lower demand from potential homeowners is likely linked to the sale price index increasing by 2.1% q-o-q, reflecting a continued rise in asking prices on listed properties.

PropertyGuru Malaysia country manager Sheldon Fernandez said it found that there is a decrease in property demand, with the second quarter in 2023 (Q2’23) being the fourth consecutive quarter where there exists a visible gap between property demand and pricing.

“However, we hope to see an increase in consumers’ appetite for property as the overnight policy rate (OPR) is currently paused at 3%. Keeping in mind that current borrowing rates remain lower than the pre-Covid rate of 3.25%, we are hopeful that an uptick in demand is on the horizon as Malaysia’s inflation eases”, he said in a statement recently.

Despite the downtrends in property enquiries, the report revealed notable areas that are growing to be favourable among potential homebuyers, such as Cheras, Kuala Lumpur which has been a hotspot for potential homebuyers as it boasts a mature township with convenient access to main highways and the mass rapid transit system.

“As property values in urban centres continue to rise, homebuyers are shifting their focus to more affordable options in suburban locations. Strategically situated townships on the outskirts, such as Taman Connaught in Cheras and Pandan Indah in Ampang, offer properties with comparative value and connectivity at lower price points.

“Given current market conditions, it is unsurprising that recently completed projects in these areas are garnering increased interest from prospective homeowners,” said Fernandez.

In Johor, Permas Jaya experienced increased interest in its property market, driven by factors such as affordability, proximity to Singapore and long-term investment potential.

The report said projections suggest the Johor real estate market might experience further growth, given the anticipated operation of the Rail Transit System line in 2026 and the potential revitalisation of the Kuala Lumpur-Singapore High-Speed Rail.

Similar to the previous quarter, the top two most viewed landed projects are located in Johor, with Leisure Farm maintaining its top spot on the list.

Country Heights Kajang – a township in Kajang is the most viewed landed project within Klang Valley. Both are gated communities, which could indicate that competitively priced properties are still attracting higher demand from consumers.

In addition, the report indicated a decrease of 11.3% quarter-on-quarter in rental demand index, following the drop in purchasing demand, which is likely due to rising rental prices that exceed the budgets of many prospective tenants, as indicated by the 4.9% q-o-q increase in the rental price index during the same period.

With the existing contrast between landlords’ expectations and tenants’ financial capa-bility, it could indicate that more younger Malaysians are delaying their plans to move out of family homes and live independently.

Concurrently, the rental supply index witnessed a 13.1% surge, reflecting the increase in property owners who remain optimistic with the gradual recovery of the economy along with increased job opportunities brought in by foreign investments.

In Q2’23, Princess Cove in Johor continued to be the leading high-rise development among prospective renters as its location near the Johor Causeway appeals to tenants working in Singapore, with more professionals seeking alternatives to the higher-priced Singapore market.