Will Malaysia’s real estate industry recover in 2021?
The local property market is set to bounce back next year
With the onset of the global pandemic, many countries worldwide and also countless industries have suffered the onslaught of this viral scourge. The road to recovery for Malaysia’s property sector is a long and winding one, and paved with countless trials and tribulations. Since March 2020, Malaysians have been grappling with the aftermath of constant lockdowns and MCOs that have by and large threatened businesses and livelihoods. Key issues include overhang properties, unaffordable housing, loan refinancing, economic uncertainty and high living cost continue to plague overall homeownership in Malaysia. Fortunately, there is still hope. With the introduction of the Covid-19 Vaccination Programme nationwide, citizens are gradually being inoculated and hopefully the pandemic would be nipped in the bud by next year. Is there a light at the end of the tunnel for real estate in 2021? Most of us think so, only time will tell.
Boosting confidence in property
Boosting consumer and investor confidence is ever crucial towards uplifting the overall property sector in registering positive growth and sustained development. The residential sector continues to battle an ever-growing glut or oversupply of homes which remain unsold. Landed properties largely remain in demand despite the overhang situation of high-rise residences especially with serviced apartments. With more residential developments priced below RM500k, first-time homebuyers can now afford to own a home. Potential buyers may take advantage of the current low interest rates to buy their dream homes whilst developers are also pushing for more sales throughout HOC 2020/2021. The extension of the HOC towards the end of 2021 certainly augurs well for homebuyers and investors in general. With more smart initiatives and better measures from REHDA, the property industry is definitely on the right track or path towards recovery. The real estate fraternity must also work closely with the government to realise the ultimate goal.
Embracing the new norm
Property developers are jumping on the digitalisation bandwagon by providing digital marketing tools and technologies to counteract this prevalent pandemic. Apart from building affordable homes to boost homeownership, developers are now focusing on smart homes via digital initiatives which can help buyers attain economic prosperity. Intelligent home design with seamless internet connectivity are upcoming trends for future workplaces as well as ‘work-at-home’ initiatives. Retail shopping is also facing a similar situation with their continual operations amidst dwindling customers and escalating business costs. For such malls and other retail stores, it is either consolidating their business or face imminent closure and shut down. Also, in the pipeline are new malls which are anticipated to attract more shoppers by offering a more holistic shopping experience.
Property market updates
Amid the gloomy outlook for property in 2021, analysts and gurus have forecasted that the overall property sector would bounce back in the second quarter of next year. To date, transaction activities declined some 15.8 per cent to 204,721 units in the third quarter of 2020, with value dropped 21.6 per cent to RM80.71 billion compared to the same period in 2019. Whilst the residential sector declined 14.3 per cent in volume in the first 9 months of 2020 with 14.8 per cent in value. Instead of relying upon federal government directives, state governments should also be more proactive in solving the perennial housing problems faced by homebuyers. Affordable homes are truly the step in the right direction during these tough times.
Government comes to the rescue
Under the recently-announced Budget 2021, the government has extended stamp duty exemptions to the secondary (sub-sales) market under 2021 Budget, providing greater opportunities for property hunters to seek out their dream properties. With further reduction to its overnight policy rate (OPR) by Bank Negara, the burden of home loan repayment would also be eased or alleviated. This has certainly stirred the interest of prospective homebuyers from the middle-income segment especially with the abundance of cheaper homes on the outskirts of cities and urban neighbourhoods.
Judging from the existing market trends, the property sector is set to bounce back in mid-2022 with investors and homebuyers adopting a cautiously optimistic as well as ‘wait-and-see’ approach. With the impending vaccination underway, it is a matter of time before the industry is fully revived and restored to its former glory. Meanwhile, it’s a buyers’ market now, so get your dream homes while it’s cheap!