PETALING JAYA: Property owners and sellers are standing firm in the face of the Covid-19 pandemic, with the PropertyGuru Malaysia Property Market Index rising to 89.8 points in second-quarter 2020 (Q2’20), up from 89.46 points in the previous quarter.
This growth was led by a 1.05% increase in asking prices in Selangor, propping up weaker performances in Penang, Johor and Kuala Lumpur, with growing interest in secondary markets in Perak as decentralisation trends accelerate. While the incoming supply index took a dip of 3.6%, this was a substantial improvement over the 10.47% drop in Q1’20.
Malaysians cited property portals as preferred sources of information to start their home ownerships during the Covid-19 outbreak and resulting movement control orders (MCOs), with social media and developer websites popular as well.
PropertyGuru Malaysia country manager Sheldon Fernandez said it has seen Selangor’s price index grow from 93.2 points in Q1’20 to 94.18 in the second quarter.
“This, coupled with Kuala Lumpur’s 1.28% drop from 96.62 points to 95.38 points over the same period, points towards a dispersion of interest from urban areas to city outskirts and satellite townships,” he said in a statement.
Developers have leveraged on this trend through a range of digital initiatives and incentives, many of which apply to projects in Selangor, driving interest there despite Covid-19 impact in the state. As the effects of the outbreak reverberate throughout the market, PropertyGuru has observed an 8.7% rise in enquiries for properties in Perak, particularly Ipoh and Taiping.
Selangor’s growth buoyed weaker figures not just in Kuala Lumpur, but in Penang and Johor as well, which saw prices decline slightly by 0.17% and 0.61% respectively. The largely sideways movement in major markets came despite projections of property price drops due to weak sentiment and industry restrictions following the Covid-19 outbreak.
“Price resilience here mirrors situations in regional markets, with sellers balking at price reductions, particularly in the auction space. However, this came with corresponding impacts on transactions, as buyers opted out of purchases in anticipation of future price drops,” said Fernandez.
Despite the resumption of economic activities in June, the supply index in Q2’20 continued to drop overall, though this contraction was smaller than in the previous quarter. Year on year, the 1.98% supply drop in Q2’20 this year contrasts with consistent year-on-year growth since Q4’17.
This declining contraction rate was evident in Kuala Lumpur, Selangor and Penang. Selangor was the only market to showcase year-on-year supply growth in Q2’20, with its supply index rising 5.12% relative to the same quarter last year.
In contrast, Johor was the only market where the incoming supply contraction rate rose quarter on quarter, from 8.09% in Q1’20 to 9.18% in the second quarter. This reflects large market corrections in the southern state, which has traditionally relied on incoming investment for growth.
Meanwhile, uptake of online platforms increased significantly during the MCO period, with 75% of Malaysians citing property portals as a preferred starting point for their home ownership journeys, according to the PropertyGuru Malaysia Consumer Sentiment Study H2’20.
More users are turning to social media as well, up from 64% in H1’20 to 66% in H2’20. Developer websites were the third-most popular source of property information, rising from 57% to 62% over the same period.