PETALING JAYA: In the face of a challenging economic landscape caused by high-interest rates and inflationary pressures, Malaysia’s property market has not only weathered the storm but has, in fact, set a new record in 2023.
Property transaction value soared to RM196.83bil in 2023, representing a 9.91% year-on-year (y-o-y) surge from the previous record set in 2022 at RM179.07bil, as reported by the National Property Information Centre (Napic) last week.
These numbers serve as a testament to the resilience of the country’s real estate industry, but what propelled these figures to new heights?
Malaysian Institute of Estate Agents former president Chan Ai Cheng identified market confidence as the primary driver behind Malaysia’s robust property sector, amid external challenges.
“When investors and consumers are confident in the market’s prospects, they are more likely to engage in transactions and make long-term commitments, driving activity and growth,” she told StarBiz.
Chan attributes the stability in Malaysia’s job market as a significant factor influencing market confidence.
According to her, stable employment, evident in low unemployment rates, boosts consumer spending power, consequently fuelling the demand for real estate assets.
Notably, in January 2024, the number of unemployed individuals decreased further, reaching 567,300 persons compared to the 567,800 reported in December 2023, while the unemployment rate remained stable at 3.3%.
Furthermore, Chan points towards the importance of readiness on the part of both buyers and sellers for a thriving property market.
“When buyers are ready (stable and finances in place) and are actively seeking properties, and when sellers are ready to list their properties at the right price, the market moves,” she said.
Chan said the local property market in 2023 outperformed 2022, challenging assumptions that the surge in buying during 2022 was solely driven by pent-up demand from the aftermath of the 2020 pandemic.
Looking ahead, she anticipates 2024 will continue on a similar trajectory. “Property ownership remains a fundamental human need, and with a growing working population, demand for real estate is expected to remain robust,” she added.
Meanwhile, property consultancy Knight Frank Malaysia group managing director Keith H Y Ooi said given several key trends and factors shaping the industry landscape, he is maintaining a moderate outlook for the property market in 2024.
“Residential property remains the cornerstone of Malaysia’s property market, with expectations of robust economic growth this year, underpinned by several key factors, including a notable increase in sales volume, the introduction of new property launches and the successful completion of ongoing developments,” he said.
He points towards the enduring significance of residential real estate, emphasising its pivotal role in driving overall market dynamics.
Anticipating favourable market conditions in 2024, including sustained demand and economic recovery, he expects residential property to enjoy robust growth and resilience.
However, within this positive outlook, he believes challenges persist particularly concerning the alignment of house prices with wages and income.
“Despite the implementation of numerous incentives and promotions by both the government and developers, achieving affordability remains a challenge for many Malaysians,” he said.
From a broader perspective, while uncertainties and challenges may endure, the property market in 2024 offers opportunities for growth and innovation, he added.
“By remaining informed, adaptable and responsive to market dynamics, stakeholders can navigate the evolving landscape and position themselves for success in the year ahead,” he stated.
Napic reported that in 2023, there were 25,816 overhang units worth RM17.68bil, reflecting a 7% reduction in volume and a 4% decrease in value compared to 2022, when there was a 27,746-unit overhang worth RM18.41bil.
Chan added the downward trend in overhang numbers reflects the government’s concentrated effort to address the issue.
Chan believes, as a homebuyer, there is no need to be excessively worried about the overhang units.
She said when it comes to purchasing a home, it should always be based on individual needs and ability rather than following the trends of others or the general market.
“While general overall figures are helpful, when it comes to making decisions based on data, you need to get specific data to the area or the type of property you want to invest in and study those trends. It’s not about following others. It’s about you,” she said.
Meanwhile, Ooi attributes the improvement in the overhang unit number to a collaborative effort between the government and developers, exercising caution in approving and initiating new developments. Regardless, he emphasised the importance of meticulous planning, research and design when undertaking residential projects.
“The location factor includes consideration of daily amenities nearby (schools, shops, train and bus stops, etc). There is also the demand factor – are there jobs nearby which would then create the housing demand?
“Are the residential properties priced right for the surrounding catchment, or is the developer confident of creating a catchment? All these considerations are necessary before a residential project takes off,” he said.
Chan acknowledged government incentives are always a boon for the property market. She advocates for a primary focus on prioritising incentives for first-time homebuyers, whether in the primary or secondary market when the government introduces policies and initiatives.
