PETALING JAYA: In the face of a challenging economic backdrop, potential homebuyers continue to resist higher listing prices, according to PropertyGuru Malaysia’s Property Market Report for the 2nd quarter 2023 (Q2 2023).

The report indicated a significant 10.2% quarter-on-quarter (q-o-q) drop in property inquiries. This aligned with Bank Negara Malaysia (BNM) data which showed an 11% decrease in home loan applications in June.

The reduced interest from potential buyers was attributed to a 2.1% q-o-q upswing in the sale price index, which reflected an ongoing increase in the listed property values.

PropertyGuru Malaysia country manager Sheldon Fernandez said the data continued to show a decrease in property demand, with Q2 2023 being the fourth consecutive quarter where there exists a visible gap between property demand and pricing.

“However, we hope to see an increase in consumers’ appetite for property as the overnight policy rate (OPR) rates are currently paused at 3%,” said Sheldon.

“Keeping in mind that current borrowing rates remain lower than the pre-Covid rate of 3.25%, we are hopeful an uptick in demand is on the horizon as Malaysia’s inflation eases,” he said.

Emerging hotspots raise enquiries

In Q2, the report showed a surge in inquiries within the Cheras locality of Kuala Lumpur given its well-established community and advantageous connectivity to primary expressways and Mass Rapid Transit (MRT) systems.

“As property values in urban centres continue to rise, homebuyers are shifting their focus to more affordable options in suburban locations.

“Strategically situated townships on the outskirts, such as Taman Connaught in Cheras and Pandan Indah in Ampang, offer properties with comparative value and connectivity at lower price points,” it stated.

Likewise, the property market of Permas Jaya in Johor experienced a rise in attention, propelled by elements like cost-effectiveness, proximity to Singapore, and the promising prospects it holds for long-term investments.

Future projections suggest the Johor real estate market might experience further growth, given the anticipated operation of the Rapid Transit System (RTS) line in 2026 and the potential revitalisation of the Kuala Lumpur–Singapore High-Speed Rail (HSR).

Meanwhile, the top two most viewed landed projects are located in Johor, with Leisure Farm maintaining its top spot on the list. Country Heights Kajang in Selangor came out on top as the most viewed landed project within Klang Valley.

Both are gated communities boasting spacious, green spaces, indicating that competitively priced properties with lush landscapes are still attracting higher demand from consumers.

Market hit by higher rentals

In tandem with the decline in buying interest, the rental demand index registered an 11.3% quarter-on-quarter reduction.

This was attributed to increased rental costs that surpassed the financial limits of numerous potential renters, as reported by the 4.9% q-o-q increase in the rental price index during the same period.

This situation could have suggested that a greater number of younger Malaysians were postponing their intentions to transition from family residences to independent living.

Simultaneously, the rental supply index experienced a 13.1% upswing, indicating the growing number of property owners who were optimistic about the economy’s gradual rebound and the influx of job opportunities due to foreign investments.