Press Release by PropertyGuru.com.my – PropertyGuru: PropertyPrices On the Decline
PropertyGuru Market Index indicates quarterly price dropsfor three consecutive quarters in 2018
Prices have declined every month save forFebruary, June, and October 2017
KUALA LUMPUR, 26March 2018 – The PropertyGuruMarket Index (“PMI”) which tracks the asking prices of homes in Malaysia shows a continued decline in the 4thquarter of 2017 (“Q4 2017”) as the market continues to correct itself – amidst a complex scenario of growing oversupply in certain property segments and prevailing consumer unaffordability.
For Q4 2018, the PMI indicated a decrease of 1.6 percent compared to the previous quarter (Q3 2017: 0.2 percent decrease). In a year-on-year comparison, prices have declined by 3.7 percent. Save for June, February and October, all other months in 2017 showed a decline in asking prices across all classes of residential properties.
The PMI is derived from PropertyGuru’s extensive proprietary data, which includes (but is not limited to) the asking prices of over 250,000 residential property listings on PropertyGuru.com.my.
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.
“The declining trend has been evident throughout 2016 and 2017 so it’s no surprise. Importantly, it has been gradual so there are no significant shocks to the market and both buyers and sellers can adjust themselves accordingly. 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 shared.
According to PropertyGuru’s latest consumer sentiment survey – released in January this year, consumer satisfaction has improved to 38 percent with 57 percent of Malaysians intending to buy in the next six months – up from 52 percent.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, most property buyers – about 67 percent can only afford homes priced between RM300,000-RM500,000. In addition, PropertyGuru data shows that ¾ 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,” added Fernandez.
In tandem with the national price trend, all key property markets – Kuala Lumpur, Selangor, Johor and Penang have seen asking prices decline in Q4 2017.
In Kuala Lumpur, prices have dropped by 1.2 percent compared to the previous quarter (Q3 2017: 1.4 percent). Similarly Selangor, Johor and Penang saw quarterly price decreases of 2.1 percent, 0.5 percent and 0.2 percent respectively.
However, certain key locations across all four property epicentres have experienced price stability or sellers are still able to relatively maintain their price offerings. In the Klang Valley, these would be Sentul and Bangsar. Up north, BalikPulau and TanjungBungah in Penang have remained comparatively stable.
“Bangsar is a mature location with an established name, hence the ability of owners especially those who bought their properties many years ago to hold on to their prices,” explained Fernandez.
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 – GelangPatah shows upwards price movements.
“This is probably due to consumers searching for homes in alternative areas compared to the established areas of Nusajaya, Johor Bahru city and so on. However, given that Johor prices have been on a high for a while, on a y-o-y basis, prices still are holding,” added Fernandez.
The PMI is a comprehensive, insightful quarterly overview of home pricing trends at national level, as well as the key property markets of Kuala Lumpur, Selangor, Johor and Penang. The data is cleaned, aggregated and indexed to provide insights into price movements on a quarterly basis. The index also considers supply volume of properties from both the primary and resale markets.
The PMI is available to the public at:http://www.propertyguru.com.my/marketindex.
— end of press release —
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