PETALING JAYA: Malaysian property prices continued to rise against the backdrop of lower demand from buyers, creating a widening gap between purchasers and sellers, according to PropertyGuru Malaysia.
The property website operator said in its market report for the first quarter of 2023 that it registered an upward trend in the sale price index in fourth-quarter 2022 (Q4’22), with asking prices of listings increasing by 1.5% quarter-on-quarter (q-o-q), likely due to Bank Negara Malaysia’s overnight policy rate rising to 2.75% last year, contributing towards the higher overall cost of property ownership.
In contrast, it said, the sale demand index saw a significant drop of 14.8% q-o-q, reflecting how potential buyers may still be facing affordability issues or lack of confidence towards the current property prices on the market.
Country manager for Malaysia Sheldon Fernandez (pic) said that while the property market has seen healthy activity throughout 2022, its recent reports have shown that Malaysians are now more careful when making big purchasing decisions.
“Rising inflation and higher borrowing costs have tightened potential buyers’ budgets, simultaneously forcing sellers to raise their prices to cover the higher cost of property investments. This has created a phenomenon where the price gap between both parties has widened, further contributing to the housing affordability issue we’ve been tracking throughout the past year,” he said in a statement.
Following rising property prices, potential homebuyers gravitated towards the rental market, its rental demand index increased 32.9% last year. The supply of rental listings on its PropertyGuru website went up by 19.6%, as landlords were jumping back into a rental market with positive demand, seeking alternative income sources to offset inflation.
The report registered an ease in rental demand by 4.0% q-o-q in Q4’22 after consecutive increases in the previous quarters. The slight downturn in rental appetite may be due to the higher rates in the market, edging up to 2.8% q-o-q at the end of last year.
Despite this, the rental market is expected to remain active as the government recently waived industry quotas to speed up the hiring of foreign workers, who will bring in fresh demand for rental properties in industrial areas of Malaysia.
It said that following three consecutive quarters of continuous price increases, the asking prices of properties for sale in Malaysia continued its climb by 1.5% in q-o-q in Q4’22. For the whole of 2022, the asking prices listed on PropertyGuru.com.my went up by 5%, and the upward trend is expected to continue as existing homeowners increase housing prices to counter the higher overall cost in homeownership caused by the higher interest rate.
“However, property players should still place consideration of the current housing affordability issue and expect sale demand to slow down in the first half of the year. At the same time, many Malaysians are waiting patiently for government assistance in the upcoming re-tabling of Budget 2023 and an improvement in inflation before making their big purchase,” it said.