Project sales in the primary market and transactions in the secondary market sales are likely to improve this year, according to the Malaysian Institute of Estate Agents' (MIEA) annual Real Estate Market Sentiment Survey 2022/2023.
It revealed that 58.3 per cent of respondents believe the entire property market would improve, 18.3 per cent believe it will remain the same as in 2022, and 23.5 per cent believe it will fall.
Respondents are real estate practitioners who are engaged in the market and, more importantly, know and understand what is going on.
The survey was conducted on December 17, 2022, during the MIEA Real Estate Negotiators Summit, which was attended by 385 real estate professionals. The poll highlighted the opinions of sellers, purchasers, landlords, and tenants in 2022, as well as their expectations for market performance in 2023.
MIEA president Chan Ai Cheng said that 40.9 per cent of respondents believe project sales will increase this year, 30.4 per cent believe they will remain the same, and 28.7 per cent think they will drop.
As for the secondary market, 52.2 per cent felt that it will grow this year, 31.9 per cent said it will remain the same, and 15.9 per cent said it will see a decline.
Chan said there is always a high demand for new project launches since investors want to recoup their investment in 24 months for landed homes and 36 months for high-rise property, either through sale or rental.
"This market is picking up and 40.9 per cent feel that it will grow further in 2023. It is easier to purchase new projects as the outlay is much less thereby attracting those first-time house buyers.
"It is worthy to note that close to 60 per cent to 65 per cent of all transactions in the country are from the residential sector. Among these numbers also include project sales in the primary market.
"Agents play a critical role in assisting developers in project sales. As such, a bulk of the transactions are from the secondary market due to its volume all over the country. From a subdued market in 2020, 2021 and with an improving market, the secondary market is expected to grow," she said.
Market movements to improve
Respondents were asked about the number of inquiries received from purchasers through advertisements and marketing channels in the year 2022 compared to the same period January to November 2021 to identify market dynamics, particularly demand.
According to the data, 41.7 per cent of respondents indicated inquiries from prospective customers grew, 24.3 per cent said they were stable, and 33.9 per cent said they decreased.
"We are not surprised at the increase in inquiries as after the lockdown, the market opened up in the last quarter of 2021 and correspondingly the demand went up as movement became easy, people could look at properties again, more marketing and advertising activities took place, those who waited to invest could view properties, there was also a rise in the disposal of properties to wither the effect of the lockdown in some cases.
"This trend followed through till December 2022 and we can reconcile with the fact that Q1, Q2, and Q3 National Property Information Centre showed that the volume of transactions in 2022 reached 293,206, an increase of transactions by 46.86 per cent over the same period in 2021," Chan said.
In response to a question about the number of inquiries in 2023, respondents had a favourable perspective, with 49.6 per cent expecting it to increase, 31.3 per cent expecting it to remain the same, and 19.1 per cent expecting it to decline.
According to Chan, this can be attributed to the common belief that the market would perform well in 2023 due to better stability in the country as a result of the new government, actions made to develop the economy, and attempts to keep inflation under control.
"All these will help build confidence among end users and investors. In conclusion, we in MIEA feel the same as the country is stable. As long as the fundamentals vis a vis, economy, interest rate, loan accessibility, employment rate coupled with government support through incentives are in check, the property market will grow," she said.
Chan said that in the last proposed budget, there was a lack of government initiatives to support the property market except for the B40 group.
"The market is to improve and our wish is that all stakeholders need to support its growth," she said.
Selling price movements
Chan said property price movement is an important component since it reflects the asking price set by sellers.
In terms of the price adjustment in 2022 against 2021, 32.2 per cent said it climbed by 10 per cent to 20 per cent, 29.6 per cent said it kept the same, and 38.3 per cent said it declined by 10 per cent.
In general, the 38.3 per cent who claimed the price dropped was mostly due to the difficulties encountered during the lockdown. Property owners who were businessmen and employees were both impacted by lower income, and in the employment market, job losses and salary modifications had a significant influence.
According to Chan, several people had to sell their properties to make ends meet, avoid mortgage payments, and keep themselves afloat.
"Adjusting the price is also to create urgency in sales as they could very well have tried marketing the properties above market price and have to adjust to being competitive. 32.2 per cent indicated that there was an increase in the selling price and this could be largely attributed to sellers of landed properties in strategic locations," said Chan.
Meanwhile, a total of 35.7 per cent of the respondents believed that the price will increase by 10 per cent to 20 per cent in 2023 while 31.3 per cent projected that it will remain the same and 34 per cent said it would decrease by 10 per cent.
Chan said there is a common feeling that the price adjustment could be minimal as the market is recovering and there will be resistance to any price increase.
"However, we anticipate that there will be some adjustments in some pocket locations by owners who feel that their properties can demand higher prices. There is also an equal feeling from 34 per cent of the respondents that the price will decrease by 10 per cent reflecting that in many other locations, the prices will see a slight drop. This can be accepted as purchasers will play a balancing factor in resisting price escalations and this is true in a recovering market," she said.