PropertyGuru Malaysia Property Market Report Q1 2024
Report Highlights
1. Get The Guru View
2. Malaysia Property Sale Market Index
3. Malaysia Property Rental Market Index
4. Conclusion
Get The Guru View
The Malaysian residential market is entering a phase of stability after demand for homes, proxied by visits on the PropertyGuru.com.my listings, trended downwards in 2023. The increase in asking prices also moderated from last year, and the number of listings fell.
With the nation’s inflation projected to hover between 2% and 3.5% throughout 2024 and interest rates remaining consistent, the fundamental indicators of the residential market—overall home demand, the volume of listings, and asking prices—have exhibited moderated fluctuations. The decline in demand in Q1 2024 is primarily attributable to seasonal trends, particularly during the Chinese New Year period. For instance, the Sale Demand Index also declined by 5.5% in Q1 2023 and 2.3% in Q1 2022.
Certain submarkets have shown remarkable performance in the first quarter. Notably, in Johor, the Rapid Transit System (RTS) link connected the state with Singapore has further stimulated demand in the surrounding area. The Sale Demand Index for residential properties increased by 2.0% in Q1 2024. Properties near the RTS station at Bukit Chagar, such as R&F Princess Cove and TriTower Residence @ Johor Bahru Sentral, have seen significant interest from property seekers. R&F Princess Cove was among the projects with the highest number of views on the listings in DataSense.
Conversely, the rental market’s overall demand declined in the first quarter. This trend is considered partially seasonal and a response to high rental prices.
Malaysia Property Sale Market Index
The Economic and Monetary Review by Bank Negara Malaysia casts a cautiously optimistic outlook for the Malaysian economy, forecasting growth of between 4% and 5%. This growth is anticipated to be buoyed by resilient domestic demand and an uptick in external demand, underscored by the IMF’s projection of global trade rebounding from 0.4% in 2023 to 3.3% in 2024. Amidst this moderate expansion, interest rates have been held steady, reflecting confidence in managing inflation at sustainable levels.
Despite ongoing uncertainties, including heightened geopolitical tensions, property seekers have adjusted their expectations, suggesting the market is poised for stability, provided no major unforeseen shocks exist.
The slight 1.1% quarter-over-quarter dip in the Sale Demand Index for Q1 2024 is interpreted more as a reflection of seasonal adjustments rather than underlying economic concerns. Similarly, the Sale Supply Index witnessed a 4.4% decrease in the same period. Encouragingly, as the economy maintains its moderate growth trajectory without significant disturbances, the Sale Price Index has seen a 1.4% quarter-over-quarter increase.
Malaysia Property Rental Market Index
The Rental Demand Index for Malaysian residential properties saw an 11% quarter-over-quarter decrease, a trend that, while noteworthy, is partly ascribed to seasonal festivities. It would be premature to interpret this as a harbinger of a market correction. In Q1 2023, the Rental Demand Index also declined by 6.2%.
Nevertheless, this downturn may also reflect the challenges of increased supply and rising asking rents. Supply was 31.3% higher than last year’s period, albeit experiencing a slight 1.8% reduction from the preceding quarter. Meanwhile, asking rents in Q1 2024 witnessed a 2.2% quarter-over-quarter increase, marking a significant 12.4% rise from Q1 2023’s rental levels.
While these figures suggest a period of adjustment, the market’s overall resilience and the temporal nature of these shifts offer a cautiously optimistic outlook. The balance between supply and demand is evolving, and with careful navigation, the market could maintain its stability and continue to attract investment.
Conclusion
The stability of the Malaysian residential property market appears promising, assuming it faces no significant upheavals. Market performance is anticipated to vary, heavily influenced by the locations and progress of future infrastructure developments.
We anticipate that Penang’s inaugural light rail transit project will attract increasing interest. Scheduled to commence construction in the fourth quarter of 2024 and be completed by 2030, the Penang LRT Mutiara Line is poised to enhance the desirability of homes near its planned stations significantly.
While acknowledging the market’s uncertainties, there is a cautious optimism that strategic infrastructure projects like the Penang LRT will contribute positively to the market’s growth.
