KUALA LUMPUR: Asking prices for properties across the board in Malaysia declined in three out of four major markets namely Kuala Lumpur, Selangor and Penang, according to PropertyGuru Market Index (PMI) for the third quarter (Q3) 2019.
PropertyGuru Malaysia country manager Sheldon Fernandez said overall, prices in Malaysia declined 0.9 per cent year-on-year in Q3, with Penang leading the contraction with a 1.5 per cent quarter-on-quarter decrease in its PMI to 93.4 from 94.8.
“With the exception of Johor, these downticks in asking prices are representative of downward movements in longer-term trendlines across key markets since 2015.
“While asking prices aren’t necessarily interchangeable with transaction prices, they serve as benchmarks for seller sentiment, and as such, point towards moderate prospects at best for 2020,” Fernandez said.
PropertyGuru said industry analysts attribute falling prices to adjustments on the part of developers to clear unsold stock and ease cash flow, along with downward pressure from the Home Ownership Campaign (HOC).
Johor, for example, is an attractive destination for investment, with the caveat that prices there have seen marked volatility in recent years due to supply and policy shocks.
“With this in mind, thorough consideration of existing property types and incoming demand in the area is necessary, before venturing into the market,” it said.
Further north, property seekers in markets such as Kuala Lumpur and Selangor can hedge their bets, by examining purchasing sentiment.
According to PropertyGuru Consumer Sentiment Survey H1 2019, Malaysians are increasingly open to purchases in the secondary property market.
This is attributed to locational preferences, with younger home seekers prioritising older projects close to established urban centres, instead of new launches further afield.
As such, mature satellite townships like Petaling Jaya, Subang Jaya, Damansara, Shah Alam and Cheras offer better prospects for investors, though affordability will remain a concern for home seekers.
Meanwhile, the rent-to-own (RTO) approach is favoured by some industry analysts as it addresses the prohibitive upfront costs of home ownership for many home seekers.
Others note that RTO schemes can incur significantly higher total costs compared to conventional mortgages.