KUALA LUMPUR: The property market showed a consistent improvement in 2023, especially in the second half, over the past few years, signaling a recovery from the COVID-19 crisis.
In the primary housing market, the number of new launches improved quarter-on-quarter with the launch of 6,900 units in the third quarter of 2023 (3Q 2023) versus 4,797 in the 2Q 2023, said the National Property Information Centre (Napic).
According to its latest 3Q statistics, sales of new launches reached 37.6 per cent compared with 24.7 per cent in the 2Q 2023.
The Real Estate and Housing Developers' Association (Rehda) Malaysia in its Property Industry Survey for the First Half (1H) 2023 and Market Outlook for 2H 2023 and 1H 2024 also showed that new launches and sales performance fared better in the 1H 2023 compared to the last four years, with 14,392 units launched and 11,273 units sold.
The survey also noted that the improved performance is expected to overflow into the 1H 2024 although there would be some headwinds due to factors like elevated interest rates, consumer preference to rent, rising material costs and higher cost of living.
The overall broad property market, which includes all sub-segments of real estate, saw more than 100,000 transactions worth RM57.15 billion in the third quarter, a 3.7 per cent rise in volume and a 22.6 per cent rise in ringgit value compared to the same quarter a year ago.
Better situation with "sick projects”, overhang units
The Local Government Development Ministry (KPKT) took steps to address abandoned private housing projects as they are a financial burden for buyers besides robbing them of their dream to move into their own homes.
Through a special task force, KPKT has revived 256 projects worth RM23.37 billion as of August 2023 - a relief to many buyers.
As for overhang units, NAPIC recorded 25,311 completed unsold houses worth RM17.40 billion in the 3Q 2023. This represents a 3.7 per cent fall in volume and a 4.9 per cent drop in ringgit value compared to the previous quarter.
PropertyGuru (PropertyGuru.com.my and iProperty.com.my) country manager Sheldon Fernandez said while the government and developers are taking measures to reduce overhang units, efforts are needed to prevent the recurrence of sick projects.
"It requires a multi-faceted approach that involves both the government and developers. Some preventive measures that could be considered include having stricter regulations, improved planning and risk management, and a build-then-sell model," said Fernandez.
Developers could use Napic’s recent launch of its Open Transactions Data to understand market trends and consumer behaviour and be guided in their future planning.
Homebuyers, renters and investors could also be helped to make informed decisions as they would be guided to understand price trends in different areas and negotiate for better deals.
Many developers are introducing sustainable elements in their new developments to gain a competitive advantage due to a convergence of different factors involving global trends, government initiatives, consumer demand, and cost considerations.
According to PropertyGuru's recent consumer survey, 71 per cent of respondents do consider climate change when making property decisions, and 62 per cent are receptive to green homes.
"Several banks are also introducing sustainable finance solutions to assist developers in this shift to environmentally sustainable properties.
"This sustainability trend will likely continue into 2024, influencing both supply and demand," said Fernandez.
Outlook for 2024
Rehda Malaysia said rising optimism from developers and homebuyers signals a recovering residential market given the sluggish performance of this sub-segment over the past years.
"Things are looking up for 2024. We have faith in the federal government to take further initiatives to further secure industry players’ confidence," it said.
Fernandez of PropertyGuru Malaysia said a shift towards rental properties and an increased focus on sustainability will be the two key trends in 2024.
"It is essential to remember that the property market is dynamic and influenced by many factors. Staying informed of the market and adapting to short-term changes are crucial, aside from transparency and access to information," Fernandez said. - Bernama