Home Market Weak Property Market Provides Unique Purchasing Opportunities For Home Buyers And Investors

Weak Property Market Provides Unique Purchasing Opportunities For Home Buyers And Investors


While the property market is still recovering from the various cooling measures, the introduction of the goods and services tax (GST).

While the property market is still recovering from the various cooling measures, the introduction of the goods and services tax (GST), the current political and economic climate, weakening ringgit and stringent bank regulations, a survey by the iProperty Group, Asia’s No.1 network of property portals, have revealed that majority of Malaysians are still interested in purchasing property. The only difficulty they face is that it is harder to qualify for home loans.

The iProperty.com Asia Property Market Sentiment Survey (H1) 2016, which is the ninth iteration of the survey and the longest-running study of its kind, was conducted on the iProperty Group’s leading websites in Malaysia (iProperty.com.my), Indonesia (Rumah123.com and rumahdanproperti.com), Hong Kong (GoHome.com.hk and Squarefoot.com.hk) and Singapore (iProperty.com.sg).

The Respondents

The survey polled close to 13,000 respondents and 40% of respondents were from Malaysia. Majority (71%) were aged between 21 to 40 years old and 58% were married. Respondents were mainly property owners looking to purchase another property (39%) or first-time home buyers (26%). Slightly more than a tenth of the survey respondents (15%) are just monitoring the market.

The survey also revealed that a continued slowdown is expected and higher loan rejection rates point to a challenging year for the property sector.

Shedding light on the survey findings, iProperty Group’s CEO, Georg Chmiel said that the survey findings showed that Malaysia’s property sector is expected to be “flat” this year, while market prices will benefit those looking to buy or rent houses.

Key Findings

• Weakening Ringgit Spurs Interest from Singaporeans 

The weakening Ringgit has resulted in higher interest from Singaporeans looking to invest in Malaysia, more specifically, Iskandar Malaysia. Survey respondents from Singapore have revealed that Iskandar Puteri (previously known as Nusajaya)  (59%) and Johor Bahru City (40%) are the preferred investment location within Iskandar Malaysia.

• No Savings due to High Household Expenses 

Half of the respondents (50%) can cover their household’s expenses but are unable to save. With more than half of respondents (60%) owning the property that they live in, majority of them are still paying mortgages which have more than 20 years left. The findings have revealed that 54% can manage their monthly loan repayments, while 22% face difficulties.

• Low Interest to Invest Overseas

The weakening ringgit has also resulted in Malaysians having low interest to invest in property overseas. Only 23% were interested to purchase in Australia, Singapore and the UK. The top two reasons for purchasing have been very consistent – it is a good investment and migration to that country in the future.

• High Interest to Purchase but Affordability Continues to Remain a Major Concern 

Despite a low percentage of respondents that purchased properties in the last 12 months, many still believe that it is currently a good time to invest in both primary and secondary properties. The three most popular types of property to purchase have been consistent among the survey respondents – Private Condominium / Serviced Apartment, Terrace Houses and Flat / Walk-up Apartment.

Most respondents (63%) are looking to purchase in the next 12 months from now, while a significant percentage (37%) are only looking to purchase at least in 2 years’ time. The budget to purchase still remains up to RM500, 000.

• Insufficient Affordable Housing Available

Despite the government’s efforts to have more affordable housing available, 66% of respondents especially KL based home buyers feel that the additional affordable homes are insufficient as there is still a strong migration from low to medium-low income households in different states coming into Klang Valley.

Conclusion – A Weakened Market is good for those that can buy or don’t have to sell

“Even though Malaysians are concerned about the rising house prices and affordability, property is still viewed the most attractive investment choice by survey respondents. Our survey respondents have informed us that property is the most preferred investment option due to capital growth opportunities and it’s also more stable compared to other assets. As such, a flat property sector provides excellent purchasing opportunities for those with access to funds. A weakened market is good for those with holding power,” said Chmiel.

He concluded by saying that starting from the second half of 2016, the market will commence to inch forward slowly and it will start to rise again in 1-2 year time.