KUALA LUMPUR: PropertyGuru Malaysia yesterday announced that its Malaysia Property Market Report (MPMR) Q1 2022, powered by PropertyGuru DataSense, registered a substantial increase in the Rental Demand Index in Q4 2021, with a hike of 30.53 per cent quarter-on-quarter (QoQ) and 57.91 per cent year-on-year (YoY).
The Rental Demand Index, which represents the proportion of interested property renters based on inquiries for rental units listed on PropertyGuru.com.my, is expected to grow further in the current quarter as consumers are shifting their focus from buying to renting.
“The increasing demand for rental properties could be indicative of shifting priorities among home seekers who face difficulties in securing home loans in the current climate, as banks continue to be conservative about loan approvals. As such, potential homebuyers are temporarily putting their purchasing plans on hold to ride out this period of economic volatility. Instead, they are opting to rent homes to satisfy their upgrading needs or pursue their desired lifestyle improvements, while rebuilding confidence towards making large property purchases,” Shylendra Nathan, Country Manager, Malaysia (PropertyGuru.com.my and iProperty.com.my) shared.
The shift in consumers’ priorities is also reflected in MPMR’s Sale Demand Index, which registered a sharp drop of 36.56 per cent QoQ and 7.7 per cent YoY during the final quarter of last year.
Factors that might have contributed to the sluggish home seeking activity in Q4 2021 — aside from difficulties in obtaining adequate financing and increasing focus on the rental market — include consumers’ preoccupation with the year-end festivities and the recent flooding events which might have triggered home seekers to reassess their buying plans.
Overall, the property market continued on a gradual trend of improvements, as captured by the MPMR Q1 2022. The Sale Price Index, which measures the confidence of sellers via asking prices listed on PropertyGuru.com.my, continued to inch upwards by 0.14 per cent YoY, despite a slight dip of 0.19 per cent QoQ in Q4 2021.
Shylendra shared, “Following the liberalisation of movement controls and economic activity in Q4 2021, we saw an uptick in the overall property market activity in Malaysia. We believe that the market will remain cautiously optimistic about continued improvements in the general market environment as the year progresses, on the back of better economic conditions and higher vaccination rates.”
The Sale Supply Index, which provides a view of supply trends through the volume of newly launched and resale property listings on PropertyGuru.com.my, reflects some of this confidence. In Q4 2021, supply moved up by 13.54 per cent QoQ, following negative growth in the previous quarter. Supply also grew by 22 per cent YoY, compared with 5.3 per cent YoY growth in the preceding quarter.
The recovery of the property market will continue to be closely linked with the overall health of the national economy, and it will also face new complexities in terms of consumer confidence with the altered social and commercial landscape driven by COVID-19. Among the challenges faced by the property market is the lack of incentives for buyers since the government-initiated Home Ownership Campaign (HOC) ended on 31 December 2021.
“With little direct incentives for the property market in Budget 2022 and the expiry of the HOC just as the market begins to find its footing, there is no doubt that buyer confidence may be impacted, and further pressure will be placed on financial indicators in the near term,” Shylendra said.
“As such, expectations of a quick property market rebound this year have now been moderated.
Instead, we can expect improvements to occur at a gradual, steady, and measured pace. In the meantime, the rental market will grow as demand increases among those who opt to put off purchasing plans during this period of economic uncertainty.”
