Malaysia’s residential rental market is expected to see an improved demand as more people opt to rent rather than acquire a home amid stagnant property prices and bleak market outlook, according to property experts.
“Most potential buyers will be adopting a wait and see attitude and the market is not expected to improve until the middle of 2022, provided herd immunity is achieved by then and there is political stability,” said James Wong, Managing Director of VPC Alliance (KL) Sdn Bhd.
“Unable to commit to a purchase, the only option available for those who require accommodation is to rent, hence the residential market will improve. Also, some developers are offering buyers to rent with an option to purchase,” he told The Malaysian Reserve (TMR).
Since 2015, residential rents have undergone adjustments, with many landlords asking for low rentals to attract tenants, said CCO & Associates (KL) Sdn Bhd ED Chan Wai Seen.
“Generally, rental rates for newly completed projects or properties located nearby new projects will continue to be highly competitive. Rental rates may gradually improve when properties located within the new projects have achieved high occupancy rates,” he told TMR.
“With the large number of affordable properties coming into the market, we expect rental will remain at a highly competitive level.”
Danny Wong Teck Meng, CEO of Areca Capital Sdn Bhd, revealed that there are two school of thoughts – the residential property overhang is affecting the rental market, while the second states that many working adults prefer to rent instead of buying a home.
Wong believes the situation highly depends on the location, noting that the rental market currently remains soft.
Kit Au Yong, Property Valuer at Asiacap Valuers & Property Consultants Sdn Bhd, expects the property market to remain soft in the first half of 2021 (H1 2021) until the H1 2022, before gradually improving in H2 2022.
“We maintain a cautious view about the property market performance. However, the market is treading carefully in response to the current volatile unprecedented short- to mid-term condition,” he said as quoted by TMR.
Malaysia’s economy had been significantly affected by the COVID-19 pandemic, with the country’s GDP contracting 5.6% last year.
Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said in April that the country’s property market registered a 9.9% year-on-year drop in transaction volume last year, while transactions value fell 15.8% year-on-year.
The Property Market Q1 2021 Snapshot released by the National Property Information Centre showed that property transactions dropped 11.6% to 80,694 in the first quarter of 2021 (Q1 2021) from the previous quarter.