Juwai IQI head of bumiputra segment Muhazrol Muhamad (pix) shares his views on the property market for 2022:
2022 overview
Beginning in the first half of 2022, we forecast recovery in the property market as purchases of both new and secondhand residences climb. The rising number of transactions will eventually lead to upward price pressure, especially in the most popular market segments.
The economy
The recovering economy is the first factor that will help drive the property market. Growth in the manufacturing and services sectors will increase employment and have a positive effect on household income and savings.
Economic growth in 2022 will result from continued policy support, the expected relaxation of Covid containment measures, and an increase in demand in both the external and domestic sectors.
A rebound in the manufacturing sector and in construction and infrastructure projects will boost employment, and act. Export growth will be supported by high external demand and an increase in commodity prices.
Employment is already recovering and will be even stronger in 2022. 15.4 million people were employed in September compared to 15.2 million in January. Unemployment has dropped from a higher 5.3% last May to 4.5% in September.
Bank Negara Malaysia projects 5-6% economic growth in 2022, compared to an estimate of about 4.5% for this year.
The pandemic
While we don’t yet have rigorous data on the new omicron variant, how easily it spreads, the severity of illness it causes, or how easy it is to treat, we have learnt a lot about managing the pandemic over the past two years.
For proof, just look at Covid-related hospitalisations, which in Malaysia are at just one-quarter of the level of their peak earlier this year.
Through testing, vaccination, and communications campaigns, the government has effectively reduced the pandemic’s impact. There is every reason to believe the lessons learnt in battling Covid will also help us contain risks from the new variant.
Our base case is that Malaysia will continue to progressively reduce Covid’s impact and that Omicron will have only an insignificant impact on the real estate market.
