Malaysia’s property outlook: Up, down or stagnant?
KUALA LUMPUR, Aug 10 ― Signs of financial distress in the country are getting more prevalent and clearer as the Covid-19 impact bites deeper into Malaysia’s economy, resulting in rising unemployment and shrinking incomes.
The Department of Statistics Malaysia’s May 2021 data showed that the jobless rate was at 4.5 per cent, involving over 728,000 workers, although it dropped marginally from 4.6 per cent in April 2021. The economic impact has not been isolated, rather the damage is spreading to other sectors, including property despite the various relief measures and loan moratoriums. The Household Income Estimates and Incidence of Poverty Report 2020 has revealed that 20 per cent of the Middle 40 income group, that is those earning between RM4,850 to RM10,959, has shifted down to the B40 group due to the pandemic, while among those from the Top 20 category, 12.8 per cent has shifted down to the M40 group. While the vaccination rate, which is on track to achieve herd immunity by October 2021, could shed some light and hope, the future remains unclear on how fast the economy can recover from the damage done it. As of Aug 8, 2021, over 24 million doses of Covid-19 vaccines have been administered in Malaysia under the National Covid-19 Immunisation Programme . By percentage, this means that 48.3 per cent of the country’s population have received the first dose of the vaccine while 26.9 per cent have completed the full two doses.Christopher Tan, 47, is one of many property owners who have had to let go of their properties during the pandemic. As global travel came to a halt, Tan, who resides in Singapore, lost his job as a pilot in June last year. To sustain his livelihood with his wife and two children, he had no choice but to offload his apartment in Cyberjaya last August. "It was a difficult decision to make but that was the fastest way to get some cash although it was at a loss. I bought that apartment for RM826,000, but sold it at only RM450,000," he said. At the end of 2020, home loan rejection rates in Malaysia stood at 28 per cent, according to data by Bank Negara Malaysia. Among the reasons for the rejections was that borrowers were already highly indebted, and have a poor credit history with little residual income after taking into account monthly living expenditures and existing financial obligations. According to the National Property Information Centre , in 2020, the overall property sector recorded 295,968 transactions worth RM119.08 billion, which was a 9.9 per cent year-on-year decline in volume and a 15.8 per cent drop in value compared with 2019. Meanwhile, a total of RM117 billion is expected to be withdrawn from the Employees Provident Fund this year, largely from the i-Sinar and i-Citra programmes. This huge amount shows that the people continue to be under pressure financially but have had to opt for the withdrawal, although it would impact their future savings in the longer term. The fact is, even before the pandemic, the property sector was already facing the issues of oversupply and overhang and for the longest time, Malaysia has been known for its house prices being unaffordable compared with the average income level - a combination of factors that has knocked prices off a little. PropertyGuru Malaysia noted that in the first quarter of 2021, the overall property asking prices inched down by 0.84 per cent quarter-on-quarter and 1.79 per cent year-on-year to 87.86 index points due to buyers' apprehension. Napic has also revealed that the number of newly launched residential units dropped significantly to 5,919 units in Q1 compared with 14,865 units in Q4 of 2020. PropertyGuru's latest Malaysia Property Market Index report said the overall property supply in the market spiked by 34.53 per cent year-on-year and 11.94 per cent quarter-on-quarter in Q2 this year. The surge in property supply in the country in Q2 was likely driven by an increase of homes being put up for sale in the secondary market under the current economic climate, according to the property technology company. The upward trend in property supply was observed across four key economic states covered by the MPMI, namely Kuala Lumpur, Selangor, Penang, and Johor, which saw a y-o-y increase of 16.91 per cent, 48.95 per cent, 40.32 per cent, and 17.47 per cent respectively. AmInvestment Bank Bhd, in a recent research note, has maintained a “neutral” stance on the country’s property sector for the second half of 2021 , with a cautious outlook. The investment bank said the various movement and economic restrictions could lead to a slower-than-expected recovery in the sector. It noted that the local property sector has been languishing in the last five to six years after an upswing in mid-2013 when the House Price Index saw double-digit growth. The investment bank is less optimistic in terms of sales in the second half of the year as momentum could slow down from mid-May with the imposition of the movement control order 3.0. “Last year, when the first MCO lasted 1.5 months , housing sales fell 11 per cent quarter-on-quarter in Q2 FY2020 and thereafter rebounded by 121 per cent q-o-q in Q3 of 2020. “However, we do not expect the same pace of recovery in H2 2021 as economic activities are only allowed to resume in phase three which is targeted to be in September under the National Recovery Plan . Real estate sales and media company Juwai IQI reckons it is not all gloom and doom for the property sector, especially when a recovery is expected to unleash pent-up demand both in Malaysia and elsewhere. The group's co-founder and chief executive officer Kashif Ansari said Bank Negara Malaysia’s stance in keeping a check on both the ringgit's structural stability and price inflation would keep the economic momentum going amid the Covid-19 impact. "We believe the real estate sector remains resilient and expect property prices to appreciate by three to five per cent next year due to strong demand, the economy reopening, and an accommodative monetary policy.”Related Articles
Please follow us on Google to support us Malaysia Latest News, Malaysia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Bursa Malaysia rebounds to open higher | Malay MailKUALA LUMPUR, Aug 9 — Bursa Malaysia rebounded from last week’s close to kick off the week higher, driven by renewed buying interest in selected heavyweights due to lower stock prices, dealers said. At 9.16am, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) rose 4.87 points to 1,494.67 from...
Read more »
Bursa Malaysia remains higher at mid-morning | Malay MailKUALA LUMPUR, Aug 7 — Bursa Malaysia remained in the positive territory at mid-morning on continued buying support in selected heavyweights. At 11am, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) rose 6.20 points to 1,496 from 1,489.80 on Friday. The index opened 1.96 points better at...
Read more »
Malaysia's construction sector up 42.6pc in Q2 year-on-year, highest since 2012 | Malay MailKUALA LUMPUR, Aug 9 — Malaysia’s construction sector grew 42.6 per cent in the second quarter of 2021 (Q2) year-on-year (YoY) to RM28.2 billion, the highest growth recorded since second quarter of 2012 due to the lower base last year. The Department of Statistics Malaysia (DOSM) said the...
Read more »
Bursa Malaysia slightly higher at mid-afternoon | Malay MailKUALA LUMPUR, Aug 9 — Bursa Malaysia was slightly higher at mid-afternoon, with the key index remaining in positive territory amid weaker market sentiment on the regional stock markets, dealers said At 3.02pm, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) rose 4.06 points to 1,493.86 from...
Read more »
Twenty-two athletes to carry Malaysia’s challenge at Tokyo Paralympic Games | Malay MailKUALA LUMPUR, Aug 9 ― Twenty-two athletes will carry Malaysia’s challenge in nine sports at the Tokyo Paralympic Games, slated to be held from August 24-September 5. Paralympic Council of Malaysia (PCM) president, Datuk Seri Megat D Shahriman Zaharudin said 18 of them are male athletes while...
Read more »
Bursa Malaysia ends higher on positive domestic economic update | Malay MailKUALA LUMPUR, Aug 9 — Bursa Malaysia closed higher today, supported by persistent buying in selected heavyweights as the market reacted positively to the domestic economic development, dealers said. The benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) rose 6.93 points to end the day at 1,496.73...
Read more »