Industry experts say there will be growth in residential property prices, rents, and market activity nationwide in the next one to two years.
They are bullish on the outlook and expect positive activities in the eight states preferred for investment in Malaysia, this is according to a survey of 386 Malaysian real estate agents conducted by Juwai IQI last month.
Juwai IQI is one of the largest real estate groups in Southeast Asia with more than 7,000 agents.
Respondents forecast significant growth in the number of transactions that will be completed over the next twelve months by all buyer groups.
Juwai IQI group executive director Kashif Ansari said, agents have a very strong, positive outlook on the future of the residential real estate sector over the next 12 and 24 months.
“The survey findings show that the states with the most robust price-growth outlook are Kuantan and Ipoh. Respondents predict prices in Kuantan will grow 9.4 per cent over the next 12 months, while prices in Ipoh are pegged to grow 7.6 per cent," he said.
Kashif said, the states with the weakest outlook for price growth are Penang, with 2.1 per cent forecast growth, and Sarawak with forecast growth of 3.4 per cent.
"Overall, Ipoh has the most positive outlook. One-hundred per cent of respondents in Ipoh expect local first-time buyers to buy more properties in the state over the next 12 months than in the past 12 months. At the same time, 87.5 per cent of respondents predict local upgrade buyers will also make more property purchases in the coming year.
"Of the various buyer groups, the buyers with the most bullish forecast are local first-time buyers. Nearly two-thirds of respondents, or 64.7 per cent, believe first-time buyers will increase the number of transactions they complete in the coming year, versus only six per cent who think they will not. Local first-time buyers are the largest buyer group in the new-build market and the third- largest in the secondary market," he said.
Kashif said, the buyer group with the largest share of nation-wide subsale or secondary market is local upgrade buyers.
By contrast, relatively few local upgrade buyers purchase in the new-build market, he said.
Kashif said, foreign buyers often seem to get more public attention than other buyer groups, but they account by far for the smallest share of all transactions.
"Foreign buyers purchase fewer homes than local first-time buyers, local investors, or local upgrade buyers," he said.
Respondents report that foreign buyers account for 19.3 per cent of new-build transactions and 19.7 per cent of subsale/secondary transactions.
Looking at the new-build market, the states where foreign buyers account for the largest share of transactions are Kuantan (25.9 per cent), Sabah (20.2 per cent), and Kuala Lumpur/Selangor (20.1 per cent).
The states that acccount for the smallest share of newbuild transactions is Melaka (14 per cent), Ipoh (15.4 per cent), and Penang (17.9 per cent).
Kashif said, in a win for the government’s efforts to stimulate the economy and reduce the overhang of unwanted, unsold property, 79.7 per cent of respondents nation-wide expect foreign buyers to buy more property in the next 12 months than in the prior 12 months.
The states where the largest share of respondents believe foreign buyer transactions will grow in number are Ipoh (87.5 per cent), Kuala Lumpur/Selangor (86 per cent), and Sarawak (84.6 per cent).
The states where the largest share of respondents believe the foreign-buyer transactions will fall in number are Melaka (26.3 per cent) and Kuantan (25 per cent).
Juwai.com executive chairman Georg Chmiel said the lower price threshold for foreign buyer purchasing will help absorb some of the unsold inventory that has been weighing on the market.
"While the price thresholds are only being lowered for one year, hopefully that will give foreign investors enough time to purchase. For the market to be healthy, developers need to sell those unwanted units so they can build more projects that are suitable for local buyers. Our recent survey of hundreds of agents found that 71 per cent approve of the lower foreign buyer price threshold.
"We expect all these factors to support the residential real estate market in 2020," he said.
Rents heading upward?
When it comes to the rental market, the findings show that Ipoh has the highest growth forecast of any state, with rents expected to increase by 12.25 per cent.
Respondents predict that rents in all states except Kuantan, will increase by more than five per cent over the next 12 months.
The forecast for rent in Kuantan is negative at -0.1 per cent.
The two-year forecast for residential rents is much stronger than the 12-month outlook. Respondents believe that national rents will increase by 11.4 per cent over the next two years, said Kashif.