KUALA LUMPUR: Malaysia’s residential property market is expected to register moderate growth in 2022, with developers set to offer more needs-based products following valuable lessons learnt over the course of the Covid-19 pandemic and the past.

       CBRE|WTW group managing director Foo Gee Jen said long gone are the days when annual growth for residential property transactions were in the double-digit range.

       “In the last two years, we’ve seen a lot of ‘wait-and-see’ approaches from first-time homebuyers or even upgraders,” he said at the launch of CBRE|WTW’s “2022 Market Outlook Report” yesterday.

       “We are cautiously optimistic that the market will rebound this year, albeit at a slower pace. It will not be the same level of highs that was seen between 2010 and 2014, where growth was in the double digits.”

       Foo said growth will be spurred mostly by pent-up demand, as potential homebuyers now have a better gauge on their level of job security and even salary growth prospects, compared with two years ago.

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       “Certainly, people now are a lot more confident and not overly dependent on future projections compared with their current needs.”

       According to the National Property Information Centre (Napic), the residential property market recorded 61,311 transactions worth RM35.98bil in the third quarter of 2021.

       This was a decrease of 31.29% in volume, but a marginal growth in value of 6.5% compared with the third quarter of 2020, which recorded 89,232 transactions worth RM33.78bil.

       Additionally, Foo believes that it was right of the government to end the Home Ownership Campaign (HOC) and not extend it further.

       “The HOC has been around for quite some time and I think there has been an overstay, in a way, in that we’ve been having the campaign for many rounds and to the point that people have started taking it for granted.

       “The way I look at it, moving forward, even without the HOC, I strongly believe that developers will make adjustments and continue to give incentives. But, it will very much be driven by the consumer and listening to the needs of the market.”

       The government kicked off the HOC in January 2019 to address the overhang situation in the country.

       The campaign, which was intended for six months, was extended for a year. It generated sales totalling RM23.2bil in 2019, surpassing the government’s initial target of RM17bil.

       The government reintroduced the HOC in June 2020 under the Penjana initiative to boost the property market after it was adversely affected by the Covid-19 pandemic.

       The campaign, which finally ended on Dec 31, 2021, has been seen by many as an effective buffer against the adverse effects of the pandemic.

       According to Napic, there were 30,290 unsold completed residential units (overhang) worth RM19.75bil as at September 2021, compared with 30,926 units worth RM19.99bil in the previous corresponding period.

       Many property developers, who still registered record sales during the pandemic, mostly attributed their stellar performance to the HOC.

       Commenting on the overhang of property in the country, Foo believes the pandemic may have indirectly helped to improve the situation.

       “The last two years have been a blessing in disguise in a way, where developers have become a lot more cautious in terms of their launches.

       “Most of the units were focused on the affordable segment, or even if mid-to-high-end units were launched, they have been on a much smaller scale.”

       Foo emphasised that these units still reported good take-up rates.

       “The overhang over the years has been more of mismatch issues, rather than the oversupply of new units.

       “These were projects with either the wrong products, or in unfavourable locations and with the wrong prices.

       “Even at the peak of the market, I don’t think anyone would’ve bought these types of properties.”

       The way I look at it, even without the HOC, I strongly believe that developers will make adjustments and continue to give incentives. - Foo Gee Jen

       As such, Foo believes the overhang situation in the country will be an uphill task to resolve.

       “It’s going to be a long, challenging issue for the government to resolve, especially if you look at some of the PR1MA homes, for instance.

       “Many of these homes were built in the middle of nowhere. Even with pricing of between RM300,000 and RM400,000, which may seem to be affordable, there are no proper public amenities or public transportation in these areas.”

       Foo said this will continue to be an issue until improvements are made to the entire ecosystem.

       “This is because housing is not just about the property itself, it’s about the surrounding ecosystem.

       “It’s about whether there is a nearby school for the children; if there is a clinic for the homeowner to take his ailing parents to; or if there is a nearby supermarket to buy the groceries and do some shopping.”

       According to Napic, there were 30,290 unsold completed residential units (overhang) worth RM19.75bil as at September 2021, compared with 30,926 units worth RM19.99bil in the previous corresponding period.

       Of the 30,290 overhang units, 18,829 units (or 62.2%) comprised high-rise units, while 6,803 units (22.5%) consisted of terrace houses.