KUALA LUMPUR: The residential property sector is not expected to be as badly impacted as tourism or foreign direct investments by the prolonged Covid-19 outbreak, says PropertyGuru.
Even though Malaysia may see a decline in foreign purchasers such as from Hong Kong and China and a delay in projects throughout the supply chain following the Covid-19 outbreak, Malaysia’s property market would not be directly impacted, it said.
“This is because most developers are still keeping their focus on building houses within the affordable price range,” PropertyGuru Malaysia country manager Sheldon Fernandez told Bernama.
He said the bulk of property sales in the country are generated from the affordable segments.
However, developers and owners across the board are tempering their hope as the industry adjusts to the closing of the Home Ownership Campaign and lack of strong catalysts this year, he noted, citing the findings of the PropertyGuru Malaysia Property Market Index (MPMI) first quarter (Q1) 2020 report.
In the report, the overall MPMI for the country dropped by 1.04 index points from 89.94 in Q3 2019 to 88.90 in Q4 2019, representative of a longer-term decline.
These adjustments, in conjunction with Bank Negara Malaysia’s (BNM) Overnight Policy Rate (OPR) revision in January and Budget 2020’s emphasis on rent-to-own (RTO), serve to make property in Malaysia a buyer’s market in the near term.
In January, BNM cut the OPR by 25 basis points to 2.75 per cent, the lowest in nine years after reducing it to three per cent from 3.25 per cent in May last year.
“Asking prices have been on the downtrend since fourth quarter 2016, bringing costs of homeownership down with them. Besides, the OPR cut often leads to lower interest rates for loans and short-term increase in approvals, making it an opportune time for property seekers,” he said.
At this juncture, Fernandez said, there is still a lack of accessibility and visibility of information on demand and supply in the property market.
The latest technology and adoption of Industry 4.0 (I4.0) is much needed to narrow the gap on the information on prices, types of property, location, shortage and so on, he added.
He also said BNM’s third-quarter 2019 Bulletin reported that 72 per cent of rejected home loan applications were for the purchase of homes that are either seriously or severely unaffordable relative to the applicant’s income level.
The loan approval rate during this period was nearly 75 per cent.
“Here is where property technology plays a crucial role as it could help to provide the latest data and checks on enquiries on the required property.
“Besides having the National Property Information Centre’s (NAPIC) Unsold Property Enquiry System Malaysia (UPESM) as a reference, applications such as for credit checks, home surveys and PMIs initiated by PropertyGuru are also helping Malaysians to make more informed decisions,” he said.
He said 60,000 Malaysians have been empowered under the PropertyGuru Own Your Home initiative.
Moving forward, Fernandez opined that the outlook for the property sector remains neutral this year, as market players are adopting a wait-and-see approach in the first half of 2020 before taking the right move for the rest of the year. – Bernama
