PropertyGuru Malaysia Property Market Report Q1 2023
The Malaysian economy expanded by 8.7% YoY in 2022, the highest annual growth recorded after 2000 (8.9% YoY). It expanded by 7% YoY after recording a double-digit growth of 14.2% in Q3.
According to Bank Negara, the economy is expected to grow at a moderate pace between 4% and 5% in 2023 and is unlikely to experience a recession. Growing domestic demand and an increase in electrical and electronics, and the tourism sector job openings will likely help offset the slower external demand.
Despite the strong rebound of the economy, home buyers saw their wallets shrink as headline inflation hit 4.5% in Q3 2022, and the Overnight Policy Rate (OPR) reached 2.75% from its historic low of 1.75% since May 2022. Consequently, property demand eased in the fourth quarter, partly due to the election and year-end travel.
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Report Highlights
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Malaysia Property Sale Market Index
Top 10 Areas That Saw the Highest Increase in Interest
Malaysia Property Rental Market Index
Conclusion
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Malaysia Property Sale Market Index
The asking prices of residential properties in Malaysia went up by 1.5% in QoQ, following three consecutive quarters of the increase in prices. For the whole of 2022, the asking prices listed on PropertyGuru.com.my went up by 5.0%.
Due to the increase in asking prices in 2022, more sellers were seen listing their properties. In Q4 2022, the Sale Supply Index rose by 21.1% YoY. Nevertheless, the Index eased by 1.0%, as owners held off their decision to sell as a result of the General Election and festivities.
Top 10 Areas That Saw the Highest Increase in Interest
With listing prices becoming ever more expensive for properties located within the Klang Valley and the central business district, prospective buyers have now set their sights towards the fringe area due to larger and more affordable housing options that are connected and served by Light Rail Transit or expressways.
Malaysia Property Rental Market Index
The rise in asking prices and interest rate hikes have pushed some buyers, especially those who are equity constrained, to the rental market.
For the whole of 2022, the Rental Demand Index went up by 32.9%, and the Rental Price Index rose by 11.5%. The supply of rental listings on PropertyGuru.com.my website also went up by 19.6%, as landlords were seeking alternative income sources to offset the inflation.
However, the Rental Demand Index eased in Q4 2022 due to the end-of-year travelling. The decrease could be a dip and is likely to rebound after the Chinese New Year. The Rental Price index edged up by 2.8% QoQ in Q4 2022, with owners trying to set higher prices to offset the price inflation and the higher interest rates.
Unless the Malaysian economy significantly slows down, the asking rents are likely to maintain or even appreciate in Q3 2023.
Conclusion
The economy is expected to expand by 4.0% – 5.0 % in 2023, supported by firm domestic demand and continued improvements in the labour market.
Malaysia’s growth remains vulnerable to weaker-than-expected growth due to geopolitical tension and higher interest rates. Increasing costs due to higher interest rates and higher asking prices imply that equity-constrained buyers would either shift to the city fringe well served by public transport or rent.
The Sale Demand Index could show a slowdown in the first half of the year while the Sale Price Demand Index is expected to remain higher because of the tight labour market.
The rental market is likely to remain active, especially after Malaysia waived industry quotas to speed up the hiring of foreign workers unless the private sector slows down employment and scales down considerably in view of the uncertain outlook.
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If you’re interested in more property insights, check out our prior Property Market Reports
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