Malaysian property developers are more bullish about the property market in the second half of this year (2H2021) than in the first half of this year (1H2021). In the second half of the year, especially the fourth quarter, the economy is predicted to improve, boosting buying sentiment.
According to The Star, NAPIC's Annual Market Report 2020
said that the rollout of the COVID-19 vaccine would assist enhance company confidence, household mood, and the broader economy.
Most property specialists in the country agree that the residential sub-sector will continue to drive the property market, as it has in the past.
The residential sub-sector will account for the majority of transactions. At the same time, most purchasers are apprehensive about the prognosis for the time being. There is rising optimism, particularly with the release of the COVID-19 vaccine.
Property developers predict that this year will be a buyers' market since developers are more proactive in driving sales.
Home Ownership Campaign (HOC)
The HOC was launched in January 2019 to solve the country's property overhang issue. It was supposed to last for six months, but it was extended to a year.
The campaign was a success, with total sales of RM23.2 billion in 2019, above the government's planned aim of RM17 billion.
The government revived HOC in June of last year as part of the Short-Term Economic Recovery Plan (Penjana) to help the property market recover after the pandemic.
Kenanga Research, on the other hand, believes that although property sales may improve this year, they will not return to pre-pandemic levels.
Keep in mind that this is underpinned by flexible measures that provide temporary assistance. With the HOC, the real estate gains tax exemptions will expire in December 2021.
Extending the HCO, according to one analyst
, would assist boost the real estate market. Many property players are hoping for an extension of the HOC. When the government re-implemented the movement restriction order in January, sales were particularly impacted, stated the analyst, as published by The Star.
Recall that the government had dedicated a total of RM1.2 billion in funding under Budget 2021
to housing projects, primarily for the low-income group, and to different incentives targeted at boosting homeownership, particularly for first-time buyers.
In light of the COVID-19 pandemic, NAPIC identified 2020 as a problematic year for the residential sub-sector
. In 2020, the sub-sector saw 191,350 transactions totalling RM65.87 billion, a decrease of 8.6% in volume and 9% in value from the previous year.
Selangor was the state with the most volume and value, accounting for 23% of overall volume (44,032 transactions) and 33% total value (RM37.79 billion). There were considerably fewer new releases in the main market in 2020, with 47,178 units compared to over 60,000 in 2019.
Cautious Buyer Mentality
The cautious buyer mentality and slow property market, according to NAPIC, led to the market's poor sales result of 28.7%. Meanwhile, according to NAPIC, the number of overhang units fell 3.6 percent to 29,565 in 2020, despite a 0.5 percent rise in value to RM18.92 billion.
The continuing overhang difficulties, according to Kenanga Research
, will impact the property companies or property developers. The good news is, things are set to change when the National COVID-19 Immunisation Programme
picked up in July 2021, the period when more vaccines are expected to arrive in Malaysia.
The Bottom Line
The Malaysian property market is likely to rebound in the second half of 2021, especially the fourth quarter. Since the COVID-19 vaccine is already rolled out, the residential sub-sector will likely drive the property market until things normalize.
Moreover, property investors who are waiting for the worst to end will start to enter the property market in Malaysia
For more information regarding the properties in Malaysia, including Penang residential property, get in touch
with Airmas, a leading new housing developer in Penang, Malaysia.