New data suggest that the residential real estate market in Malaysia is headed for a post-pandemic rally over the next 12 months, according to the just released Juwai IQI Malaysia Property Survey and Index Q3 2022.
KUALA LUMPUR, Malaysia, July 26, 2022 /PRNewswire-PRWeb/ -- New data suggest the residential real estate market in Malaysia is headed for a post-pandemic rally over the next 12 months, according to the just released Juwai IQI Malaysia Property Survey and Index Q3 2022.
"We surveyed real estate agents around Malaysia," said Juwai IQI Co-Founder and Group CEO Kashif Ansari. "They tell us prices and rents are likely to increase significantly over the next 12 months. If they are right then we should expect a significant increase in activity. In that scenario, people who own their own homes will benefit from the increasing values, while those who rent or are seeking to buy will have to continue to raise their budgets."
Agents advise it is better to buy today than rent
"Whether agents advise you to buy or rent is a strong indicator of their outlook for the market," said Ansari.
"We asked them what they would advise a friend. Nearly nine out of 10 of surveyed Malaysian real estate agents said they would advise a friend that it is better to buy today than to rent.
"By contrast only 11% said that they would advise a friend that it is better to rent today than to buy.
"This data suggests to me that agents expect renters to face rate increases over the next 12 months and for home prices to correspondingly rise. Those who buy now would be spared from these pressures.
"When you look at who has the biggest opportunity here, you see that slightly more than one-third of Malaysians aged 20 to 39 are renters. That's the highest percentage of renters of any age group."
Rapid rise in rents and home prices expected
Ansari said, "The survey reveals the real estate industry expects significant residential price growth over the next 24 months.
"Agents believe that residential prices will climb nationally by 11.8% over the next 12 months. The growth will continue the following year come up with prices ending up 16.5% higher over the next 24 months.
"In Penang, agents predict 17% price growth in two years. Agents in Johor forecast 18.1% price growth in the same period. Kuala Lumpur and Selangor agents anticipate 15.9% price growth, and agents in Sabah expect price growth of 14.7% over the next two years.
"We have been doing the Juwai IQI Index and Survey since 2019, and these numbers make up the most robust residential price growth forecast we have yet recorded.
"The forecast has changed significantly since the third quarter of 2021. Then, agents anticipated a 5% decline in residential prices, and events proved they weren't far off.
"One reason that agents are so bullish on the real estate market is that they are overwhelmingly optimistic about the economy.
"Forty-five per cent of agents believe the economy will be somewhat stronger or much stronger during the next six months.
"Forecasts from Bank Negara Malaysia support the positive outlook. The Bank believes the Malaysian economy will continue to improve this year and that GDP growth could climb as high as 6.3%. The reopening of international borders and government investment projects will boost this economic activity.
"Malaysia's first quarter GDP growth rate of 5% was high by global standards. That is faster growth than in China, the USA, and other major economies. We have gotten used to thinking of China as the fastest growing economy in the world, but it's not that way in 2022. Malaysia is now growing more quickly than China."
First-time buyers winning in new developments
Ansari said that, "The big winners in the competition for new homes are first-time buyers.
"Since the beginning of the pandemic in early 2020, first-time local buyers have increased their share of new development project purchases.
"During the pandemic, first-time buyers increased their share from around 30% to about 35% of new development transactions.
"Meanwhile, both investors and buyers who were upgrading from one home to another lost about 1% of their new development market share."
Media Contact
Dave Platter, Juwai IQI, +61 432 814 888, [email protected]
SOURCE Juwai IQI
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