KUALA LUMPUR: The property market in Malaysia is set to grow this year although a sound recovery is envisaged only from next year onwards, say property consultants.
Rahim & Co International Sdn Bhd real estate agency chief executive officer Siva Shanker (pic) is confident that this year will be positive for the property market despite “being on a flattish curve but any curve is still better than a negative curve.
“We have had a bad two years, you can’t recover so quickly and the recovery will also be gradual.
“However, we expect to see the property market surging ahead from 2023 and 2024 onwards,” he told reporters at Rahim & Co property market 2022 outlook briefing yesterday.
Property consultants in general are of the view that the local market is expected to recover later than anticipated, despite the pent-up demand for properties seen in the second half of last year.
While many stakeholders are anticipating for the market to recover by the second half of this year, Rahim & Co research director Sulaiman Akhmady said “the market would take at least another 12 months to recover as more clarity on domestic policy is needed from the impending 15th General Election that could influence investor confidence.”
While many stakeholders are anticipating for the market to recover by the second half of this year, Rahim & Co research director Sulaiman Akhmady said “the market would take at least another 12 months to recover as more clarity on domestic policy is needed from the impending 15th General Election that could influence investor confidence.”
Other key factors which are crucial for the recovery in the property market include how fast international borders will reopen as well as the unresolved issues faced by the property market at the pre-Covid-19 period.
“Pre-pandemic, there were many unresolved issues that still need to be addressed such as the property overhang as well as affordability in terms of income levels of the people.
“We won’t be surprised if the market improved by the end of this year or early next year after getting more clarity on the latest government policies.”
Another key concern among property consultants is the rising unsold residential units, which are under construction as well as the unsold units that still have yet to be constructed.
Citing the latest statistics, Sulaiman said the unsold residential units under construction jumped to 123,890 units in the third quarter of last year (Q3’21) from 114,392 units in Q1’20, while the unsold units that are not yet constructed rose to 24,593 units in the Q3’21 from 15,643 units in the Q1’21.
He pointed out that the current buying incentives for property also has not made enough of an impact as long as the disposable income levels and the economic uncertainties continue to persist.
“This brings forth a problem of completed units which rivals against newer incoming units.
“The longer a dwelling remains unsold after completion, the lesser appeal it holds to the buyers,” explained Sulaiman.
As of Q3’21, the overall number of unsold residential units in the country increased to 205,217 compared to 192,956 units in the corresponding period a year ago.
Rahim & Co executive chairman Tan Sri Abdul Rahim Abdul Rahman meanwhile noted that the situation of the office market in the Klang Valley is “worrying” with supply surpassing 150 million sq ft of the existing office space.
This will be even more challenging with an additional 10 million sq ft coming into the market over the next two years, Rahim added.
“This has heightened the level of concerns felt on the sustainability of such market capacity when put together against a demand pace that has slowly declined over the years.
He also said the Klang Valley’s occupancy rate was at 72.1% in the first half of last year (H1’21), down 3.3% from 75.4% in H1’20.
“At this tenancy level, the Klang Valley’s office market is looking at a vacant space size of 41.9 million sq ft currently sitting empty and unoccupied,” he said.
Rahim said that one of the factors contributing to the challenging situation faced by office building owners include the new workplace practices that focused more to remote working mode.
On another note, Rahim suggested the government extend the Home Ownership Campaign (HOC) incentive to the secondary market.
“HOC was introduced to help buyers to buy their first home from the developers, but actually there are more transactions being made in the secondary market and HOC would help spur this market as well,” noted Rahim.
The HOC ended on Dec 31 last year. Apart from the property market, Rahim revealed that Rahim & Co is in the midst of finalising an affiliation agreement with UK-based estate agency firm Chestertons which has a network of over 100 offices across Europe, North America, the Middle East, Africa and Asia.
“This latest development represents the next stage of Rahim & Co’s growth and depth of expertise in real estate, covering residential, commercial, industrial as well as property management and consultant services, globally.
“This international affiliation is very important as we will not only service Malaysian investing overseas but also international investors to invest in the Malaysian property market,” added Rahim.
He said the agreement is expected to be finalised by early March this year.