Malaysian property transactions for Q1’21 down 44.7% on-year, sub-sales deals in Klang Valley hit three-year high

PETALING JAYA: Residential property transactions in Malaysia in first-quarter 2021 (Q1’21) saw a year-on-year (y-o-y) drop of 44.7% compared with the same period last year, but sub-sale transactions reached a three-year high in the Klang Valley, according to the Q1 Property Market Update report released by PropertyGuru DataSense, the data analytics and solutions arm of PropertyGuru.

Of the overall number of property transactions across Malaysia, a majority of 61.2% were found to be made by first-home buyers (FHBs). In three of Malaysia’s major property markets – Klang Valley, Johor, and Penang, FHBs outnumbered purchases made by investors by 13.2%, 65.2% and 0.08% respectively.

PropertyGuru DataSense managing director Thor Joe Hock (pix) said with increased worries over Covid-19 cases as well as a softer-than-expected gross domestic product (GDP) performance, it is no surprise that it observed lower confidence in the market and a y-o-y dip in residential property transactions in Q1 this year.

“However, it is encouraging to note that incentives such as the My First Home Scheme and the Home Ownership Campaign have helped to drive first-home buyers to take that step towards homeownership during this quarter.”

Sub-sales were found to have dominated the market during this quarter, with many property owners selling their assets at competitive prices for liquidation, offering both FHBs and investors alike an opportunity to purchase them at below market value. This is especially prominent in the Klang Valley, which recorded a three-year high for sub-sale transactions at 83.72%.

For FHBs, buying on the secondary market means being able to get a quality home in a good location on a smaller budget. This is in line with findings from the PropertyGuru H1 2021 Consumer Sentiment Study, which found that of those who prefer sub-sale properties, majority cited the ability to scout the location and environment before buying (55%) and ease of managing the purchase with a smaller budget (39%) as the top reasons for their preference.

“Sub-sale property has typically appealed to more seasoned investors largely due to the ability to place a down payment on the unit, making it easier for an investor to invest in several properties. The secondary market also allows greater access to property, particularly landed units, in better locations. As land banks are used up, new developments often must settle for more remote locations which may take investors a longer time to see a return on the appreciation value,” said Thor.

With a large portion of the nation’s workforce working from home since the start of the pandemic, the type of properties that buyers are purchasing has also changed. This is reflected in the transaction data from Q1 2021, which found that homebuyers are favouring larger, more spacious units in the RM300,000 to RM500,000 price range. Buyers preferred landed units over high-rise in Q1’21, with terrace houses making up 54% of transactions in Malaysia followed by condominiums/apartments (18%).

“Now that many employees no longer need to travel to the office every day, they can opt for areas further away with lower density and more spacious layouts that could comfortably fit an extra room for a home office. We observed that the desire for larger, more spacious property has resulted in a shift towards terrace houses as well as properties in the fringes of city centres, driving up transactions in smaller townships in Q1’21. We believe this trend is likely to continue into the second half of 2021.”

Many among the top 10 projects with the greatest number of transactions this quarter are areas located away from city centres in self-contained townships such as Bukit Sentosa and Bandar Bukit Beruntung in Rawang, Bandar Putra in Kulai.

In November 2020, PropertyGuru Group acquired property data company MyProperty Data, and following this, MyPropertyData is now rebranded as part of PropertyGuru DataSense. The Q1 Property Market Update report is a part of PropertyGuru DataSense’s continued commitment to champion property data democratisation in Malaysia following its rebranding exercise.

PropertyGuru DataSense is focused on joining data with transparency, creating an integrated property ecosystem by becoming the provider of the most comprehensive property data and insights to agents, financial institutions, homebuyers, credit rating agencies, valuers, and property developers.

“Our goal is to empower Malaysians with accurate and easy access to data for every step of their property journey so that consumers can buy or sell property at the right market price and capitalise on potential gains in the future.

“In addition to integrating the business under PropertyGuru, the rebrand also represents the group’s commitment in further building and growing its data business through PropertyGuru DataSense. We recognise that data play a vital role in the growth of the property industry, and thus, we aim to continue providing property players and homebuyers with access to big data analytics and solutions to help them make informed investment and property decisions,” said Thor.

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