PropertyGuru Malaysia Property Market Report Q3 2022 - Powered by PropertyGuru DataSense

·7-min read
PropertyGuru Malaysia Property Market Report Q3 2022 - Powered by PropertyGuru DataSense
PropertyGuru Malaysia Property Market Report Q3 2022 - Powered by PropertyGuru DataSense

The property market in Q2 2022 continued on an expected trend of gradual improvements, indicating a similar trajectory for the upcoming Q3 2022.

However, it must be noted that rising inflation (3.4% as at June 2022) and the Overnight Policy Rate increase to 2.25% in July this year, will weigh heavily on the appetite of property purchasers moving forward. The full impact of this will likely come into play in the performance of the current quarter.

Despite this, the reopening of international borders and the transition of the COVID-19 crisis to the endemic stage, are positives that will aid the ongoing market recovery.

PropertyGuru Malaysia Property Market Report Q3 2022 presents three main indices – the Price Index, Supply Index, and Demand Index – for both the sale and rental market, as well as high-rise and landed properties captured on PropertyGuru.com.my, powered by PropertyGuru DataSense.

Report Highlights

  1. Get The Guru View

  2. Malaysia Property Sale Market Index

  3. Malaysia Property Rental Market Index

  4. High-Rise Property Sale and Rental Market Index

  5. Landed Property Sale and Rental Market Index

  6. Area Focus: Kulai, Johor

  7. Conclusion

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Get The Guru View

Malaysia Property Sale Market Index

The Sale Price Index, which tracks the movement of asking prices for listed properties on PropertyGuru.com.my, improved on the 1.04% QoQ and 1.71% YoY growth captured in Q1 2022 by registering an increase of 1.08% QoQ and 2.87% YoY in Q2 2022.

Similarly, the Supply Index, which is based on the overall volume of listed properties, continued to move upwards by 6.20% QoQ and 13.21% YoY. This was an improvement on the 0.31% QoQ gain in the previous quarter, but the yearly gain slowed in comparison to 19.10% YoY increase in Q1.

The Demand Index, based on the number of listings that were viewed, actioned upon, and enquired by users on PropertyGuru.com.my, showed a change in trajectory. Demand moved up by a notable 7.93% QoQ in Q2 2022, after dropping by 2.40% in the previous quarter. It also rose by 18.37% YoY, improving on the previous 15.43% YoY gain in Q1.

Several factors contributed to the performance of property sales during the quarter, including the more positive outlook due to the normalisation of economic activity and the re-categorisation of the COVID-19 health crisis to “endemic”.

Furthermore, the reopening of borders after a long period of restrictions has resurrected the prospect of the market’s expanded appeal to foreign buyers.

From a local-buyer perspective, however, some challenges exist. One key concern is rising inflation, which is currently at 3.4%, but global inflationary forces could drive this up further before year-end.

Adding to this is the increased cost of ownership, due to higher interest rates. Bank Negara Malaysia increased the OPR to 2.25% on July 6 this year, following a record low of 1.75% in 2020 and 2021.

While demand for home ownership remains strong in the country, the impact of the abovementioned factors will be seen more clearly in the overall market performance of the current quarter.

Malaysia Property Rental Market Index

The Rental Price index, which tracks the median asking rent prices of all rental property listing on PropertyGuru.com.my, saw an increase of 2.82% QoQ and 4.46% YoY in Q2 2022. This is an expansion on the 1.22% QoQ and 1.96% YoY rise captured in the previous quarter.

The Supply Index, which tracks the volume of rental listings, also showed notable increases in Q2 2022. Supply grew by 6.18% QoQ and 10.42 % YoY, a jump from the 1.68% QoQ and 1.15% YoY captured in Q1 2022.

The overall upward trend for rental property is being buoyed by strong demand. The Rental Demand Index, based on the volume of inquiry for listings, saw a 12.89% QoQ growth and a massive 96.83% YoY rise in Q2 2022. Again, this outperformed the already high numbers captured in the previous quarter.

The gravitation towards rental properties is a trend that is expected to continue in the current quarter and beyond, as factors such as the recent OPR increase and rising inflation will contribute additional cost burdens to would-be buyers and compel more of them to embrace the rental option.

High-Rise Property Sale and Rental Market Index

The good news in Q2 2022 is that demand for high-rise properties is back on the rise, potentially spurred on by suppressed prices, improving sentiments and the reopening of international borders, which increases the potential of take-up from an investor’s perspective.

Another factor that could be driving up demand for high-rise properties for sale is the positive performance of the high-rise rental market over the past two quarters.

Landed Property Sale and Rental Market Index

Landed properties outperformed high-rise properties in the sales market, as the desire for more spacious abodes continued to dominate the purchasing preference of house buyers.

In part, this can be attributed to lifestyle adjustments in the post-pandemic period, as many buyers are now upgrading to the comfort of larger living spaces. However, it is also likely that many buyers are accommodating to the new norm of working/functioning from home by seeking extra space to fulfil muti-functional purposes.

Area Focus: Kulai, Johor

The reopening of international borders has put Johor back in the spotlight, especially with potential interest coming from across the Causeway from Singapore. For both the local and foreign buyer market, established areas that offer good accessibility, convenient amenities and value property offerings are well-placed to gain the most attention.

One such area that’s worth a closer look is Kulai, Johor, a township located 29km north of Johor Bahru and 8km from Skudai, which is poised for success based on its growing modern industrial presence and rapid urban evolution.

Among the key reasons behind its growing appeal is its position within the Iskandar Economic Zone, which offers advantages and solutions in terms of transportation, information technology, high-tech industry, education, business and property for companies and industries that establish themselves there.

Adding to the appeal is the township’s convenient accessibility via the North-South Highway and its proximity to the Senai International Airport. It is also accessible by rail via the old KTM railroad.

Confidence in Kulai can be measured by ongoing and upcoming developments sprouting in the area. Among them, the Genting Indahpura residential township by Genting Property, a new industrial park operated by Axis Real Estate Investment Trust and a new data centre by Singapore-based Bridge Data Centres called MY06, which will be operational by year-end.

Conclusion

Overall, the property market is expected to continue to make moderate gains in the upcoming quarter, with ongoing mega infrastructure projects such as the Pan Borneo Highway and the MRT3, as well as the reopening of international borders sustaining potential interest in properties that will enjoy spillover benefits.

However, rising costs due to inflation, higher interest rates and material prices will impact buyer appetite going forward, diverting attention to a rental market that is already showing strong potential for further growth.

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

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