As many businesses and industry sectors came to a halt during the Movement Control Order (MCO) implemented back in March 2020, the property market faced its own fair share of setbacks.
Properties under construction had no choice but to stop all operations, and buyers faced financial hurdles and time constraints midway through their Sale and Purchase Agreements (SPA) or loan applications.
Homeowners and tenants struggled as well; whether it was finding and moving into a new place, halting renovations halfway, or being evicted due to the sudden loss of income.
Even as Malaysia entered the recovery phase, the property industry is still on shaky ground as the loss of jobs and zero income for many in the past months has posed major setbacks, especially in purchasing property.
With the third wave of cases hitting the nation harder than before, many are advised to stay home in order to combat the rapid rise. That means no showroom visits, property tours, and not even appointments to sign documents.
Despite the gloomy outlook, consumers in Malaysia still seem pretty positive as many are still interested in purchasing a home soon, with at least 81% eager to purchase in the next 1.5 years.
The MCO has also helped potential homeowners realise their priorities in a home: Good ventilation and natural lighting, low-density projects, reputable developers, and high-speed Internet infrastructure to accommodate working from home.
COVID-19 and The Disruption of The Property Industry
Throughout the pandemic and subsequent lockdown, it seemed likely that Malaysia would be headed for a recession as the World Bank Group assessed that the nation’s economy would contract.
To cushion the economic blow caused by COVID-19, stimulus packages were announced by the government, including some for the property sector: Exemptions for Real Property Gains Tax (RPGT), and the lifting of the 70% financing limit on housing loan for a third residential property valued at RM600,000 and above.
The pandemic and MCO might have dampened property sales and interest, but on the other hand, there are still certain areas in Malaysia showing a positive growth, as the 7 below will show!
*Editor's note: The data was taken from PropertyGuru Malaysia's ‘For Sale’ listings, showing the average month-on-month (MoM) growth in number of enquirers, from March till October 2020.
1) Sungai Petani (+20.77% MoM in demand)
This town is one of the most sought-after locations for property development in Kedah, as it’s the most active area for residential homes and townships, and has the highest number of new launches and projects under construction.
Sungai Petani’s increase in popularity can also be due to its reasonable price tag, especially for landed homes, and that the state has some of the lowest COVID-19 cases nationwide, making it one of the safer districts.
2) Ipoh (+14.80% MoM in demand)
One of Malaysia’s most famous food haven and a favourite destination for relaxed weekend getaways, Ipoh is a matured town that enjoys a slower, more laidback pace of life.
The calming lifestyle, good food, scenic nature views (have you seen those impressive limestone formations?), and a few hours’ drive from the city centre all make Ipoh an ideal retirement location, plus, affordable property prices that are well worth the price.
3) Kulim (+12.36% MoM in demand)
Hot on the heels of Sungai Petani, Kulim is rising fast to be a high-growth area for residential and commercial sectors as a new international airport is in the works.
This project will, in turn, improve employment opportunities, drive healthy competition amongst businesses, and stimulate the property market in Kulim as a strategic location for investments or one's own stay.
4) Timor Laut [Island] (+11.01% MoM in demand)
Sun, sea, and properties providing you with the most breathtaking views – that’s what makes Timor Laut a wonderful, interesting place to reside in, or as a beachfront holiday home!
If waking up to the sound of crashing waves isn’t enough, the short drive down to Georgetown and the rest of this beautiful island for some good food, sightseeing, and authentic Malaysian experience might do the trick.
5) Bayan Lepas (+10.41% MoM in demand)
An industrial hub expanding rapidly with the development of residential homes, luxury high-rises, and commercial areas, Bayan Lepas is primed as a good investment location for out-of-towners and Penangites.
The area is highly strategic due to the Penang International Airport nearby and the second Penang bridge that connects the island to the mainland (Seberang Perai), bringing in a steady influx of activity in the area.
6) Johor Bahru (+7.91% MoM in demand)
Property prices in Johor Bahru might seem steep because of its close proximity to Singapore and targeted towards expats, but here’s some good news – prices have been somewhat adjusting to stimulate property-ownership for locals, i.e. Malaysians!
The well-developed city enjoys a lifestyle similar to Kuala Lumpur, and the ease of travel to Singapore gives the property market a boost as one can live in Johor Bahru and work in Singapore, if you so choose!
7) Shah Alam (+5.57% MoM in demand)
Although Shah Alam’s recognition lies in being known as ‘the area of many roundabouts’, the town is consistently growing with the introduction of new properties, especially townships with landed homes and high-rise condominiums.
As such, Shah Alam’s property market enjoys a healthy competition between subsale and new projects as the matured environment ensures provides you with all the amenities you'd ever need, just minutes from your doorstep.
Will The Property Market Recover?
If prospective buyers were once thinking twice about buying a property, they’re probably taking it into consideration a whole lot more now.
Most economic sectors have returned to normal (as much as possible), but purchasing power is low with heavy prioritisation on essential goods and necessities.
Experts have predicted that the property market will remain soft for the remainder of 2020 and the early stages of 2021, but hopefully with an increase in property ownership and reduction in overhang units thanks to the Home Ownership Campaign (HOC) 2020 set to end in May 2021.
COVID-19 might have kept us indoors for most of 2020, but that doesn’t mean you can’t continue to plan and search for your dream home.
More than just the location, your forever home should suit your current and future needs, and in a neighbourhood that’s fully-sustainable to ensure better quality living for you and your loved ones!