KUALA LUMPUR: Housing market in Southeast Asia remains resilient despite the higher interest rate environment and the emergence of inflation.
PropertyGuru Group real estate intelligence head Dr Lee Nai Jia said the return of confidence following post-Covid-19 lock downs and easing of restrictive measures bringing some relief, coupled with strong labour markets that support a robust housing market had provided a buffer against market vagaries caused by the pandemic and Russia-Ukraine war.
This was also supported by steady inflow of foreign direct investments (FDI) into the region.
"Despite uncertainties in the global outlook, Thailand, Indonesia and Malaysia are showing increasing demand, with the latter two showing higher asking prices or listing prices.
"In fact, Malaysia, Singapore, Thailand and Vietnam residential markets continue to display resilience, as established by PropertyGuru's proprietary indices," said Lee in a report on "Southeast Asia: Macro Economic Trends and Impact on the Residential Market (Oct 2022)" by PropertyGuru.
Residential markets in Malaysia, Singapore, Indonesia and Vietnam logged an increase in prices in the second quarter (Q2) this year even though sales in Singapore and Vietnam were slowing.
He said in Thailand, while the prices of homes remained conservative, there had been a surge in demand that implied a possible recovery in the market.
"There has been a general rebound in Malaysia, Singapore, Indonesia, Thailand and Vietnam that followed the reopening of borders and more relaxed measures associated with curbing Covid.
"The factors supporting the growth of the Malaysian market are there: Malaysia and Vietnam both recorded the highest GDP increase, at about 8.9 per cent and 7.7 per cent yer-on-year respectively in Q2 of 2022," said Lee.
This, he said, led to better financial positions that in turn facilitated the maintenance of mortgage payments and the ability to raise asking prices.
In terms of FDI, Lee said the region continued to be a magnet, which directly supported job growth and enabled economies a quicker rebound from the pandemic-led slowdown.
Lee said Malaysia witnessed a jump of FDI of 264 per cent in 2021 to almost US$11.6 billion (RM54.75 billion) from US$3.2 billion (RM15.1 billion) in 2020.
"Malaysia maintained its position as an investment magnet, attracting US$28 billion (132.16 billion) in the first half half of 2022, of which US$17.7 billion came from the service sector."
Going forward, and barring any more major shocks to the economy, he said economic growth for Malaysia, Singapore, Indonesia, and Thailand was expected to moderate in 1H22 of 2023, while Vietnam was forecasted to experience economic expansion.
"We project that the residential markets in Malaysia and Indonesia will transit to the quadrant where prices appreciate, but sales volume decrease, in H1 2023," said Lee.
Those from the low-to-middle income households might be priced out of the market as most homeowners would only be willing to sell should their asking prices be met, he added.