Although the subsale residential segment has always been strong, accounting for 80% to 85% of total transactions in the property market, buyers of subsale units are not ready to pay the asking price of the property owner, as the average selling price in subsale residential is 20% lower than the asking price.
iProperty.com.my general manager for customer data solutions and quality Premendran Pathmanathan (pix) said the difference between the asking price and the actual transacted price is 20% to 25%, depending on the location of the subsale property.
“The asking price of high-rise units has begun to drop as there is too much supply out there and owners cannot command prices in the high-rise subsale residential market. Terrace houses do not experience a drop in asking price as they continue to command prices,“ he told reporters at the virtual presentation of the biannual iProperty.com.my H1 2021 Portal Demand Analytics (Subsale Market) on Tuesday.
iProperty.com.my revealed that demand for Malaysian subsale residential properties on its website has shown positive growth in H1 2021. Both unique visits and property listing supply comprising terrace houses, condominiums, serviced residences, and apartments have increased 19.2%, a turnaround from a 2.5% decline in traffic in H1 2020.
“It is encouraging to see recovery for the subsale residential market in H1 2021. The Covid-19 pandemic did not adversely affect this segment as it did in H1 2020, where the demand figure dropped into the negative region. One of the critical factors driving demand recovery in H1 2021 was that property seekers have warmed up to the idea of conducting property searches online as well as browsing for property and following up with property agents online. This has been accepted as the new normal.
“The Home Ownership Campaign (HOC) extended until December serves as a motivation too. The various HOC property deals have a spillover effect on the subsale residential segment as property seekers who are conducting due diligence will continue to browse subsale homes in the same area to compare property prices,“ he said.
The property portal said home loan applications saw an increase as well as demand for all property types.
Based on Bank Negara Malaysia’s monthly loan application data, the value of home loan applications grew 86% year-on-year (y-o-y) to RM179.4 billion in H1 2021 from RM96.4 billion in H1 2020. The value of loans approved increased by 92.6% y-o-y in the same period. With the Overnight Policy Rate at a record low of 1.75%, many consumers are searching for property bargains in a low interest rate environment.
Interest in terrace houses remains the highest in Malaysia with a 29% y-o-y increase, and this has allowed sellers to maintain their high asking prices, with an increase of 1.6%. Demand for condominiums, apartments and serviced residences is positive albeit lower, with a 5.2%, 11.7%, and 6.8% y-o-y increase, respectively. However, the asking prices of high-rise homes in all major states have dropped due to a high number of unsold units and as a means for sellers to attract buyers.
Premendran said the upward trend of approved home loan applications is promising which shows financially-abled Malaysians are still interested in purchasing homes either for their own stay or for investment purposes.
“However, positive figures aside, aspiring homeowners should plan before committing to long-term borrowing, as interest rates might not stay low for long. A return to pre-pandemic interest rates could result in higher monthly repayments in the future. As our country ramps up its vaccination programme and moves towards herd immunity, we hope the economy and by extension, the property market will continue to recover in the second half of the year,“ he said.
Compared to H1 2020, Penang’s subsale residential property demand growth has recovered from 6.5% decline to 23% growth on-year due to interest in industrial areas such as Batu Kawan and Bayan Lepas, which host many technology manufacturing companies.
On the mainland, lower-priced landed properties commanded higher asking prices between RM300,000 and RM500,000. These areas include Juru, Nibong Tebal, and Seberang Jaya.
Source: TheSunDaily.my
