Real estate players want measures in Budget 2022 to tackle rising cost of property: Juwai IQI survey

PETALING JAYA: While the country awaits the formation of the new Cabinet and the release later in the year of Budget 2022, an online survey conducted by Kuala Lumpur-headquartered real estate technology group Juwai IQI discovered that a top priority for real estate professionals around the country is for steps that address the rising cost of property.

About 75% of surveyed agents agreed with the statement that “The government should do more to address the rising cost of property.”

Juwai IQI co-founder and group CEO Kashif Ansari (pix) said Malaysia has a relatively young population and workforce. This creates strong demand for affordable residential properties in the major metropolitan areas. People are moving from rural areas to Kuala Lumpur and urban areas in Selangor, Penang and Johor, but property prices in these places have increased over the past five years. At the same time, the urban population has increased by 20%, from 20 million to 25 million.

“The pandemic has temporarily slowed the rate of urbanisation, but the rural-urban population shift will resume once Covid is behind us.

“Real estate professionals work with home buyers every single day, so they know the challenges they face. We believe that is why so many agents believe the upcoming Budget 2022 should include measures to address the rising cost of property.”

More than three quarters of agents agreed with the statement that “The government should do more to address the rising cost of property.” That includes 57% of surveyed agents who “strongly” agreed and 18% who “somewhat” agreed.

“While we look into greater detail of the survey, we see that close to 60% of real estate professionals in Kuala Lumpur and Selangor want more measures to address the cost of housing. It is no different for agents in Penang (50%), Sabah (57%) and Sarawak (55%),“ said Kashif.

Housing is a basic need and a basis for asset accumulation. According to Research for Social Advancement, in 1990, the price of the average home was equivalent to about 4.7 years of per capita income, and today it has nearly doubled to 9.5 years. Between 1990 and 2019, the average home prices have increased 5.6 times or a 460% capital appreciation. Malaysians who bought their own homes before prices climbed have been able to build financial security for their families. Those who are able to buy today will benefit from future price gains.

“The government has already deployed several policy measures that have helped first-time and lower income buyers. The process of urbanisation and the global wave of rising asset costs have pushed prices up even higher than predicted. Agents in this survey told us they believe more measures are needed.

“The new government will have a lot on its plate, especially in addressing the Covid 19 pandemic. We believe the government will also look for measures to support home buyers,” said Kashif.