The Covid-19 pandemic has had little effect on sentiments regarding Malaysia’s property market. This new information was compiled after a survey conducted by CGS-CIMB Securities Sdn Bhd.
The survey’s information showed that approximately 41% of all respondents claimed that the pandemic did not influence their interest in purchasing property. This figure is larger than the 39% of respondents whose interest decreased as well as the 20% who stated that their interest level increased.
“By buyer profile, we found that post-Covid-19, property-buying interest decreased for a majority of property upgraders, remained unchanged for a majority of first-time buyers, and increased interest for property investors,” the research house noted.
“The ‘new normal’ work practice, such as work-from-home and more flexible hours arrangements, has a limited effect on property buying sentiments. From our survey, we gathered that 56% of respondents are property investors, 24% are property upgraders, and 20% are first-time homebuyers,” CGS-CIMB added.
Buyer Sentiment Before and After the Pandemic
A survey conducted before the pandemic showed that 44% of potential buyers planned to buy property in 2020. However, of these people who expressed an interest in purchasing property, only 35.5% of them continued to be in favour of doing so following the conclusion of the Movement Control Order (MCO) on May 4, when the country transitioned into the Conditional Movement Control Order (CMCO) phase. Most of these likely buyers were people who would be buying property for the first time.
“This showed that the underlying real demand for property post-MCO is mainly coming from first-time homebuyers,” CGS-CIMB noted. CGS-CIMB also mentioned that 32.7% of potential property buyers in 2020 would defer their purchases. The remaining 31.8% had changed their minds about buying property. Most of these people were property investors.
Property Purchases and Prices
Despite the reasonable level of interest in property purchases, property prices continue to remain unaffordable for many people. Many of the survey’s respondents claimed that current property prices were beyond their current financial means. According to these respondents, their average budget for property purchase was between RM250,000 and RM500,000.
CGS-CIMB also commented on the purchase of properties in relation to their prices. It said, “We believe that the more affordable properties (below RM500,000) will likely be in demand and we have observed that most developers are rolling out cheaper units to entice buyers.”
Residential properties of less than RM500,000 made up most of the transaction volume of purchases this year. Property overhang levels, meanwhile, continued to increase during this time.
6th November 2020 16:33
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