Knight Frank Malaysia says property market improving in H2

The extended National Home Ownership Campaign would continue stir interests amongst homebuyers while providing an opportunity for developers to clear existing stock.

KUALA LUMPUR:  Malaysia’s property market is poised to gather further momentum moving into the second half of 2019 with residential housing outpacing the cautious commercial market, Knight Frank Malaysia said.

In its latest research report, Real Estate Highlights H1 2019 issued on Tuesday,  its managing director Sarkunan Subramaniam said: “Malaysia’s property market is poised to gather further momentum moving into the second half of 2019 as the market is firing various cylinders.” 

The report which highlighted the property trends and outlook in key markets of Malaysia, he said  in the residential segment, the extended National Home Ownership Campaign would continue stir interests amongst homebuyers while providing an opportunity for developers to clear existing stock. 

He said the first half of the year also saw the launches of a few high-end condominium / serviced apartment projects on pockets of land in Kuala Lumpur City. 

In Sabah, the hospitality industry recorded growth and breakthrough in the first half as the government focused on promoting the east coast of Sabah as a key tourism destination and with new hotel chain brands such as Hyatt Centric and AVANI Hotels and Resorts making their debut. 

Residential Market 

The report said one of the most impactful events during the review period was the launch of the National Home Ownership Campaign 2019 (HOC 2019) was initiated to increase home ownership among Malaysians and also to address the property overhang situation. 

“We may finally be seeing rays of hope in the housing market. The HOC 2019 campaign, which has been extended till Dec 31,  2019 is expected to provide further traction to the housing market, including the high-end condominium / serviced apartment segment. 

“Many developers are participating in the HOC as it presents a good opportunity for them to clear their existing inventories is positive for the residential market,”   Sarkunan said.

Commercial Market 

However, the looming supply and weak absorption continue to impact the Klang Valley office market although rental and occupancy levels are seen to be holding firm in the KL Fringe and Selangor. 

The availability of good grade office supply at competitive rentals and the expanding public rail transit lines have boosted the popularity of decentralised office locations. 

Knight Frank Malaysia  executive director of valuation and advisory Keith Ooi said: “In this tenant-led office market, landlords need to be realistic on their rental expectations although the growing co-working / shared services segment provides a small window of opportunity for letting.” 

He said retail sales growth have improved although consumers remain prudent in their spending amid rising cost of living and slower income growth. 

Ooi pointed out mall operators are allocating a higher percentage of their leasable space for experiential retail purpose while more retailers are integrating their digital and brick-and-mortar outlets in line with rapid changes in the retail trends and consumer behaviour.
 
‘’Despite heightened competition in the retail market, prime malls continue to enjoy high occupancies with most garnering single-digit growth in terms of rental reversion,” he said.