There is more interest in sub-sale property such as terraced houses, condominiums and serviced residences, this is based on the 2019 Portal Demand Analytics launched recently by iProperty.com.my.
Buying a sub-sale property has many advantages although it may require a higher upfront payment of 10 per cent, and makeover costs. The advantage includes getting a property that is readily available in the market and in a mature neighbourhood. Sometimes, sub-sale property is cheaper than the market price as the owner could be in a hurry to sell, or the property condition is less favourable and that is when you need to spend on the renovation.
REA Group Asia general manager of customer data solutions, Premendran Pathmanathan said the growth in user visits on the online property platform continued to outpace the growth in listings for the three property types.
This resulted in an overall increase in demand for sub-sale properties at the national level by 13.3 per cent year-on-year, mainly driven by the large demand in condominiums and serviced residences due to a modest drop in capital growth.
As for the terraced house category, which represents over 50 per cent of sub-sale residential transactions in the market, there was an increase in demand at nine per cent in 2019.
The four popular housing markets in Malaysia were Kuala Lumpur, Selangor, Penang, and Johor.
Pathmanathan said all states experienced growth in listings except for Kuala Lumpur which saw a decrease in the listing.
"Johor is the only state where the listing growth outpaced visit growth," he said.
Among the three property types, terraced houses emerged tops in 2019 in terms of capital appreciation with a 3.16 per cent capital growth compared to 2018.
Serviced residences, which recorded the highest demand growth in the first half of 2019, maintained its top position among the three property types, ending the year with demand growth of 17.3 per cent year-on-year.
Condominiums recorded a turnaround with a 14.2 per cent growth compared to -5.9 per cent in the first six months of 2019.
Pathmanathan said this can be partly attributed to a drop in the number of listings in the second half of the year.
"However, this property type registered the lowest capital growth percentage in 2019 at -2.02 per cent," he said.
State performance
Pathmanathan said, property prices in major cities throughout the country are slowly converging, with more affordable (second-tier) cities seeing their property values increase over time.
"For instance, Seremban which offers properties with an affordable median price of RM200,000 is highly attractive when coupled with factors such as connectivity and proximity to the Klang Valley, thereby contributing to its higher capital growth of 9.91 per cent.
Pathmanathan said Kota Kinabalu remains the top capital city with the demand growth of an impressive 24.72 per cent year-on-year.
He said, the number of users looking at Kota Kinabalu grew at a much faster pace in 2019 compared to the growth in the number of listings.
Petaling Jaya came in second at 22.13 per cent while Melaka saw its number of listings double in 2019, pulling down its demand figure to -5.3 per cent.
Pathmanathan said the surge in listings was contributed by condominium projects where the units are being utilised as short term rental units.
In summary, he said Kuala Lumpur improved in demand and recorded a 19.8 per cent growth, with its median pricing still the highest in the country at RM516,000 last year, although lower than the H12019 Portal Demand Analytics median price of RM540,000 in tandem with a capital depreciation by -1.61 per cent in 2019.
Selangor, on the other hand, saw its demand growing 22.4 per cent last year and the listings remained constant.
Pathmanathan said more users were checking out the terraced home category in Selangor.
Penang also experienced a turnaround with demand figures jumping to 10.6 per cent in 2019 from a disappointing -4.4 per cent in H12019 Portal Demand Analytics.
Pathmanathan said this positive shift can be attributed to the Penang South Reclamation project recently approved by the state government to be part of its multi-billion ringgit Penang Master Transport Plan (PTMP).
In Johor, the residential property landscape remained sluggish toward the end of the year.
"Johor is the only major state to register negative growth in demand in 2019. Demand figures continue their downward trend at -12.2 per cent. However, things are slowly turning around for the better as the demand figure for the first six months of 2019 was even lower at -16.6 per cent. The poor performance can be attributed to a property oversupply. There has been an influx of property listings in the review period as a result of owners of numerous newly built properties having received their vacant possessions," he said.