Large homes and affordable price ranges were the general preferences among homebuyers and investors in Kuala Lumpur, Selangor, Penang, and Johor in 2021, and this trend is expected to continue this year.
According to Sheldon Fernandez, country manager of PropertyGuru Malaysia (PropertyGuru.com.my and iProperty.com.my), buyers in Selangor and Johor prefer spacious, landed homes, whereas buyers in Kuala Lumpur and Penang prefer more affordable high-rise properties
"Moving forward, we foresee these consumer trends to continue," he said.
Sheldon, on the other hand, believes that the latest hike in the overnight policy rate (OPR) to 2.25 per cent, as well as macroeconomic uncertainty affecting the global economy, may have an impact on buying and investing activity.
"There could be another OPR hike before the end of 2022 (and) this could further affect the buying and investing sentiment," he said.
According to iProperty.com.my's research, the median transaction price and median price per square foot (psf) values of subsale residential properties in 2021 are on the rise when compared to figures from the pre-pandemic period of 2018.
The median transaction price of subsale residential properties increased by 11.1 per cent from RM315,000 in 2018 to RM350,000 in 2021, while the median price per square foot increased by 6.3 per cent from RM215.41 in 2018 to RM228.91 in 2021.
However, transaction volume in 2021 (124,996) is still lower than in 2018 (137,128).
"This shows that a higher median transaction price and median psf value do not necessarily equate to increased transaction volume," Sheldon said.
The pricing figures for landed properties (terrace houses, bungalows, semi-detached homes) and high-rise properties (apartments, condominiums, serviced apartments) across the four major states are displayed in the subsale residential property transaction data collected between 2018 and 2021.
It is based on an analysis of raw data sourced from the Valuation and Property Services Department by PropertyGuru DataSense.
The transaction data represents an official record of a property transaction once the stamp duty for the Sale and Purchase Agreement (SPA) has been paid during the years 2018 and 2021, respectively.
Sheldon said median transaction prices and median psf values of subsale residential properties have not only recovered from pre-pandemic levels but have increased in 2021 over 2018.
He claimed that the price increase in 2021 is due to improved consumer sentiments following the successful rollout of Malaysia's vaccination programme and the gradual relaxation of movement restrictions.
"We are now seeing heightened confidence trickling into the property market with improvements in certain pockets of the subsale housing market, reviving homeownership plans for some. The fact that median prices continued to rise in 2021 while transaction volume decreased could indicate that buyers who purchased subsale residential property had solid financial footing and an appetite for value-priced properties," he said.
Sheldon said that the combination of low-interest rates, low property prices, and stamp duty exemptions on memorandums of transfer (MOT) and loan agreements for first-time homebuyers (announced in Budget 2021) provided an opportune moment for buyers with the necessary means to enter the market.
The exemptions apply to up to RM500,000 homes, and the SPA must be executed and signed between January 1, 2021, and December 21, 2025.
Landed property more popular among homebuyers
In terms of median transaction price and transaction volume, landed subsale residential properties outperformed high-rise subsale residential properties in 2021.
Landed subsale residential properties had a median transaction price of RM367,200 in 2021, a 10 per cent increase from RM333,760 in 2018, while high-rise subsale residential properties saw a 7.4 per cent increase from RM270,000 to RM290,000 in 2021.
Meanwhile, landed subsale residential property transaction volume increased by 23.5 percent, compared to 13.9 percent for high-rise subsale residential property.
Despite this, high-rise subsale residential properties had higher median psf values than landed properties due to their smaller square footage.
Several factors can be attributed to the overall improvement in homeownership sentiment. According to Bank Negara Malaysia, the value of home loan applications increased by 86 per cent, from RM96.4 billion in the first half of 2020 to RM179.4 billion in the first half of 2021, owing to the record low 1.75 per cent overnight policy rate (OPR).
Terrace houses are the most popular landed property type among property borrowers, accounting for a 29 per cent increase in loan application types.
Demand for condominiums and apartments increased by 5.2 per cent and 11.7 per cent, respectively.
Performance based on states
In Kuala Lumpur, high-rise properties were in higher demand than landed properties, reflecting the capital city's large number of strata residential buildings.
The median price per square foot of condominiums/apartments in 2018 was RM460.48, compared to RM444.46 in 2021.
Condominiums/apartments' lower median psf values proved appealing to homebuyers, as there were 17,275 transactions in this property category compared to 6,442 transactions in service apartments.
From the standpoint of an investor, the gradual recovery of condominium/apartment median psf could serve as a catalyst for this property type's continued popularity in Kuala Lumpur.
In Selangor, terrace houses had the highest transaction volume in 2021 when compared to other property types (18,139).
According to Sheldon, the pandemic has changed the lifestyle preferences of urban citizens, who are now attempting to balance work and lifestyle needs.
As a result, terrace houses, particularly affordable and spacious terrace houses in the state's suburbs, became the top choice for homebuyers in Selangor, he said.
In the same year, the median psf value of terrace houses reached RM357.32, up 5.4 per cent from RM339.06 in 2018.
Sheldon believes that the popularity of terrace houses, as well as the median psf value gains of most landed properties in Selangor, indicate that this is where home buyers and investors should concentrate their efforts in 2022.
Meanwhile, Penang's serviced apartments saw the highest median psf value growth in 2021, rising 22.5 per cent from RM430.04 in 2018.
However, this property type had the lowest transaction volume both before and after the pandemic (224).
Sheldon believes that one of the reasons could be homebuyers' lack of investment appetite, as serviced apartments traditionally appeal to investors seeking long-term rental income.
With a total transaction of 2,939 in 2021, flats proved to be the most popular type of housing in Penang. He believes this is due to a previous shortage of affordable housing in the state.
In terms of median psf, flats increased by 4.7 per cent (RM274.49) in 2021 compared to 2018. (RM262.12).
Homebuyers in Johor continue to prefer landed subsale residential properties and are less interested in newly launched high-rise properties.
Terrace houses had a median psf value of RM255.03 in 2021, up 11.6 per cent from RM 228.51 in 2018.
In contrast to the emphasis on condominiums/apartments in Kuala Lumpur, Johor homebuyers see landed properties as the best living space.
As terrace houses remain a relatively affordable option in the state, homebuyers will likely be drawn to the prospect of more space and comfort while prices remain affordable, Sheldon said.