The PropertyGuru Market Index (PMI) shows a continued decline in the fourth quarter of 2017, despite a complex scenario of growing oversupply in certain property segments and prevailing consumer unaffordability.
For Q4 2018, the PMI indicates a decrease of 1.6% compared to the previous quarter. In a year-on-year comparison, prices have declined by 3.7%. Excluding June, February and October, all the other months in 2017 showed a decline in asking prices across all classes of residential properties.
According to PropertyGuru Malaysia Country Manager, Sheldon Fernandez, the declining trend is consistent with prevailing market sentiments and that the on-going price correction is healthy for the residential sector in the medium and long-term.
“Declining prices usually co-relate to improved consumer satisfaction. In fact, our last consumer sentiment survey showed consumer positivity towards the real estate sector has improved,” he shares.
Apart from that, PropertyGuru’s latest consumer sentiment survey that was released earlier in January revealed that consumer satisfaction has improved to 38% with 57% of Malaysians intending to buy in the next six months – up from 52%. Fernandez also added that with unaffordability continuing to be a major issue, there is greater downward pressure on asking prices.
“While desire to transact remains strong, 67% of property buyers can only afford homes priced between RM300,000-RM500,000. In addition, PropertyGuru data shows that three out of four Malaysians believe the market to be oversupplied. Hence, many buyers are opting to adopt a wait-and-see approach, especially with talk of general elections throughout 2017,” adds Fernandez.
In tandem with the national price trend, all key property markets such as Kuala Lumpur, Selangor, Johor and Penang have seen asking prices decline in Q4 2017. In Kuala Lumpur, prices have dropped by 1.2% compared to the previous quarter (1.4%). Similarly, Selangor, Johor and Penang saw quarterly price decreases of 2.1%, 0.5% and 0.2% respectively.
Down south, in Johor where prices have largely been on an uptrend, for Q4 2017, popular locations such as Nusajaya have seen prices decline slightly while emerging hotspot, with GelangPatah shows upwards price movements.