Home seekers opting to rent for time being: PropertyGuru Malaysia

PETALING JAYA: PropertyGuru Malaysia’s Malaysia Property Market Report (MPMR) Q1’22 indicates a substantial increase in the Rental Demand Index in Q4’21, with an increase of 30.53% quarter-on-quarter (q-o-q) and 57.91% year-on-year (y-o-y).

The Rental Demand Index (RDI), which represents the proportion of interested property renters based on inquiries for rental units listed on PropertyGuru.com.my, is expected to rise further in the current quarter as consumers are shifting their focus from buying to renting.

PropertyGuru.com.my and iProperty.com.my country manager Shylendra Nathan (pix) said the increasing demand for rental properties indicates the shifting priority among home seekers who face difficulties in securing home loans currently, as banks continue to be conservative on approvals.

“As such, potential home buyers are putting their purchasing plans on hold to ride out this period of economic volatility. Instead, they rent homes to satisfy their upgrading needs or pursue their desired lifestyle while rebuilding confidence towards making large property purchases,“ he said in a statement.

The shift in consumers’ priorities is also reflected in MPMR’s Sale Demand Index, which registered a sharp drop of 36.56% q-o-q and 7.7% y-o-y during the final quarter of last year.

Factors contributing to the sluggish home-seeking activity in Q4’21 were difficulties in obtaining adequate financing and increasing focus on the rental market including consumers’ preoccupation with the year-end festivities and the recent flooding events which might have triggered home seekers to reassess their buying plans.

It noted that the property market continued on a gradual trend of improvements, as captured by MPMR Q1’22. The Sale Price Index, which measures the confidence of sellers via asking prices listed on PropertyGuru.com.my, continued to inch upwards by 0.14% y-o-y, despite a dip of 0.19% q-o-q in Q4’21.

Shylendra said that following the liberalisation of movement controls and economic activity in Q4’21, there was an uptick in the overall property market activity in Malaysia.

“The market will remain cautiously optimistic about continued improvements in the general market environment as the year progresses, on the back of better economic conditions and higher vaccination rates,” he said.

He said the Sale Supply Index, which provides a view of supply trends through the volume of newly launched and resale property listings on PropertyGuru.com.my, reflects some of this confidence.

“In Q4’21, supply moved up by 13.54% q-o-q, following negative growth in the previous quarter. Supply grew by 22% y-o-y, compared with 5.3% y-o-y growth in the preceding quarter,“ he added.

The recovery of the property market will continue to be closely linked with the overall health of the national economy, and it will also face new complexities in terms of consumer confidence with the altered social and commercial landscape driven by Covid-19, said Shylendra.

Among the challenges faced by the property market is the lack of incentives for buyers since the government-initiated Home Ownership Campaign (HOC) ended on Dec 31, 2021.

“With little direct incentives for the property market in Budget 2022 and the expiry of the HOC just as the market begins to find its footing, there is no doubt that buyer confidence may be impacted, and further pressure will be placed on financial indicators in the near term.

“Expectations of a quick property market rebound this year have now been moderated. Instead, we can expect improvements to occur at a gradual, steady, and measured pace. In the meantime, the rental market will grow as demand increases among those who opt to put off purchasing plans during this period of economic uncertainty,“ he said.

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