The residential market may continue to be active in 2023 as a result of anticipated government measures that would focus on lowering housing costs, says PropertyGuru Group's head of real estate intelligence Lee Nai Jia.
"One of the key challenges for the government is to balance spending and revenue, and where they should put the money. We have seen countries having more expansionary policies to make housing affordable, but it may backfire because they end up having more debts and raising interest rates. "I think the government will look at all these. I believe they may also offer something similar to the Home Ownership Campaign (HOC) to encourage property purchasers," he said during the virtual discussion on the Property Market Outlook Report 2023 yesterday.
Based on the findings, 2023 will mark the start of the economy's recovery after nearly two years of the global pandemic that harmed economic and social activity.
According to the second quarter of 2022 Bank Negara Malaysia Quarterly Bulletin, as international borders reopen, positive economic growth is expected, with Malaysia's service sector accelerating by 12 per cent year-on-year.
PropertyGuru Malaysia's Sale Demand Index indicated a decrease of 6.4 per cent quarter-on-quarter (QoQ) compared to the prior year due to the rise in interest rate hikes and the uncertain outlook during the economic recovery.
It was noted that the sale demand was 42.4 per cent lower as buyers reevaluated their choices.
However, because sellers had the resources to hold out, PropertyGuru Malaysia's Property Asking Price Index increased by 1.3 per cent QoQ.
"When you see the economy going down, the intuition is that the market will follow. Not that buyers are unable to pay, but they are taking a wait-and-see attitude," said Lee.
Meanwhile, Dr. Foo Chee Hung, manager of product research and development at MKH Berhad, said price declines in 2023 are unlikely.
He said housing prices are rising, and this growth is not the result of speculation.
"In the history of Malaysia, you have not seen the house price index drop significantly. As a developer, I welcome the HOC. The main objective of the HOC which was first launched in 2019 was to focus on the overhang. The buying sentiment has been influenced after the HOC was implemented and it has been improving," he said.