With the second wave threat of the Covid-19 pandemic and with little hope of the Singapore and Thailand borders opening anytime soon, high-end apartments dominated by foreign professional tenants will face greater pressure to reduce rents.
High-end properties in Klang Valley that targeted foreign professionals were considerably affected by the Covid-19 pandemic, says SpeedHome chief executive officer Wong Whei Meng.
He believes that the monthly rent of this type of property may be reduced by five to 15 per cent as the loan moratorium comes to an end and homeowners rush to rent out their property.
Wong said when the loan moratorium became effective in April, homeowners were not in a hurry to find tenants for their vacant units.
He said after the Movement Control Order (MCO) ended in the Klang Valley, the platform's residential rental business returned to normal within one month, and houses with rents ranging from RM1,000 to RM2,000 remained very popular.
"The rental price had not changed much," he said.
In June and July, the supply and demand for residential housing in Klang Valley were in balance, he said.
But after August, they started to drop rents to lease them out quickly, especially properties where the monthly rent is higher than RM2000.
"If the rent had not been adjusted, their homes may still be vacant today. To find tenants faster, landlords will be more willing to accept any type of rental solutions that are in the market. At present, the market acceptance of the zero-deposit rental model is also increasing," he said.
Wong said Johor is also facing greater pressure to reduce rents and among the main reasons is the high number of unsold properties.
"The border closure between Malaysia and Singapore has caused many local workers to lose their jobs. The demand for local rentals dropped sharply, by an average 10 to 20 per cent," he said.
