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PropertyGuru Malaysia Property Market Report Q2 2023

PropertyGuru Malaysia Property Market Report Q2 2023
PropertyGuru Malaysia Property Market Report Q2 2023

In Q4 2022, Malaysia’s economy grew by 7%, with full-year growth of 8.7% in 2022. The growth was supported by labour market recovery and domestic demand expansions.

Despite weaker external demand, the recovery of the tourism sector and the performance of electrical and electronic exports offset the slower growth. Inflation remains a concern for home seekers, but headline inflation decreased to 3.9% in Q4 from 4.5% in Q3. Due to the cooling inflation, Bank Negara Malaysia (BNM) extended its rate pause for the second straight meeting in March. Bank Negara Malaysia (BNM) is also assessing the impact of previous rate increases on the economy given the uncertain global economic outlook.

The market still faces challenges despite recent positive developments. BNM predicts slower growth of 4.0 to 5.0% in 2023 for the Malaysian economy. Although domestic demand, significant infrastructure projects, and an increase in tourist arrivals may benefit the economy, external factors such as weaker global growth, higher risk aversion in financial markets, and geopolitical conflicts and tensions are still exerting downward pressure on growth. Additionally, inflation is unlikely to decrease further due to OPEC announced supply cuts.

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Report Highlights

  1. Get The GuruView

  2. Malaysia Property Sale Market Index

    • Top 10 Areas That Saw the Highest Increase in Interest

  3. Malaysia Property Rental Market Index

  4. Conclusion

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Malaysia Property Sale Market Index

In Q1 2023, the asking prices increased for the fifth quarter in a row by 1.6% QoQ. This rise followed a QoQ increase of 1.5% in Q4 2022. While sellers were not pressured to reduce their prices, the number of available listings in the market decreased.

Typically, the Sale Supply Index recovers in Q1, but it dropped by 0.6% following a QoQ decline of 1.0% in Q4 2022, which could be attributed to the festive season and school holidays. If this trend continues, it suggests that owners are cautious due to economic uncertainties and prefer to adopt a wait-and-see approach.

Furthermore, the Sale Demand Index fell by 5.6% QoQ, marking the third consecutive quarterly decline. While expected seasonally in Q1, this decline appears steeper than in Q1 2022, indicating buyers resist higher asking prices in light of increased interest rates and the uncertain economic outlook. This also suggests that the market sentiment remains fragile, and a significant economic shock could result in a correction.

Top 10 Areas That Saw the Highest Increase in Interest

We saw was a notable surge in enquiries for properties in Pantai Hill Park, a parliamentary constituency located in the southwestern region of Kuala Lumpur and is well connected to major destinations.

Similarly, Kangkar Pulai in Johor experienced the highest increase in enquiries, credited to its proximity to the Second Link Expressway, only a 30-minute drive away. Finally, in Penang, Berapit, one of the most well-known towns in the Seberang Perai, saw the most significant increase in enquiries.

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Malaysia Property Rental Market Index

In Q1 2023, the Rental Demand Index saw a 6.3% QoQ decline, marking the second consecutive quarter of decrease. However, the rental demand remained above pre-Q1 2022 levels, despite the drop. The decline in rental demand could be attributed to a significant increase in rental prices, with the Rental Price Index rising by 4.7% QoQ and 15.3% YoY.

Conclusion

The price gap between property seekers and sellers is widening as the Sale Demand Index shows signs of peaking. This situation is expected to continue. Sellers are unlikely to adjust prices downwards, as the economic fundamentals remain strong despite slower growth. Some sellers may withdraw their listings, which reduces the number of options for property seekers.

Despite the fact that Malaysian banking institutions have minimal exposure to recent bank collapses, property seekers remain wary due to events like the collapse of the US-based Silicon Valley bank. The unexpected increase in the Overnight Policy Rate (OPR) by Bank Negara by 25 basis points to 3% will further temper the demand.

Read the full PropertyGuru Malaysia Property Market Report Q2 2023:

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If you’re interested in more property insights, check out our prior Property Market Reports

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