The residential rental market will face increasing pressure to reduce rental price as the loan moratorium comes to an end next month.
Malaysia introduced a six-month loan moratorium for borrowers automatically. The moratorium in place since April was for the benefit of individuals and small- and medium-sized enterprises during the Movement Control Order (MCO) to fight the spread of Covid-19.
Speedhome chief executive officer Wong Whei Meng said homeowners will face pressure to repay loans from September.
"Based on the analysis by the Bureau of Statistics, Malaysia's unemployment rate this year is estimated to rise to 5.5 per cent at the end of the year. Even if tenants are lucky enough to keep their jobs, they will face pressure to reduce their wages," he said.
Wong said according to the company's transaction data, after the MCO ended, the rental expectation gap between homeowners and tenants has been significantly reduced.
The pressure for a rent reduction, however, still exists, he said in a statement.
"This is primarily due to two factors, the decrease in tenant income and the increase in housing supply. At the same time, the government may consider levying a housing vacancy tax, which may also speed up the willingness of homeowners to find tenants for their houses," he said.
Wong believes the housing vacancy tax is not a good policy because the housing market in Malaysia has fallen into a cold winter.
He opined that the housing vacancy tax will be the last straw to crush the real estate market.
"In the past few years, the housing market's interest in buying has cooled down significantly. The government does not need to further sell houses. Instead, it should think about how to more efficiently balance market supply and demand, and avoid developers from building high-priced houses in the wrong location that are decoupled from the needs of local residents.
"Fortunately, many developers have delayed or suspended their new property projects. This is a good thing for the residential rental market. The market supply will not continue to increase, which provides a certain buffer for the decline in residential rents," he said.
Wong said Speedhome expects that the number of people who choose to rent will continue to increase, but the homeowner must find ways to provide more added value to the tenants.
He cited Speedhome's policy of replacing the deposit with insurance as a weapon for renting.
Further, there are homeowners who target the student tenant market and they are providing public space cleaning services and the internet as an added bonus.
Wong said in the next six months to one year, the low- and medium-priced residential rental market in Malaysia will still favour tenants and he recommends that homeowners make good use of digital technology and publish their own rental information on different platforms.