The Malaysian real estate market is expected to see a minimum price adjustment of 10 per cent, post-Covid-19, says Malaysian Institute of Estate Agents (MIEA) president Lim Boon Ping.
Lim said during the online ASEAN Real Estate Forum that the market will also shift to a buyer’s market, from a seller’s market previously, as a result of Covid-19.
In his presentation on Malaysia and based on a slide presentation on the potential property market outlook post-MCO, Lim said: “We would expect a minimum of 10 per cent adjustment”.
He was referring to a statement by a representative from Indonesia who said that some properties (in Indonesia) are down by 50 per cent.
“I don’t see a 50 per cent reduction (in property price). In Malaysia, it should be somehow slower, probably 10 per cent or maybe the maximum we could be seeing is some 20 per cent,” he said.
The participants of the forum titled “Our Lesson Learned”, were the Asean Real Estate Networking Alliance (Arena) council of presidents. They concluded that the regional economy will turn around and there will be a rebound of the market in a short period.
Secretary-general of Arena K Soma Sundram said willing sellers and willing buyers, coupled with aggregate demand and supply, will dictate prices and the market movement after the Movement Control Order (MCO) is lifted.
“In Malaysia we expect price adjustment to be in the range of 10 per cent post-MCO. In certain areas where there is too much supply or too many properties and there’s a lot of people selling, it could be in the range 10 per cent and 20 per cent so it is not a blanket price adjustment,” he told NST Property.
Sundram said, although demand for houses has dropped significantly, there are groups of investors looking for a good buy.
“These are people waiting for the price to come down. Immediately after the MCO is lifted we can expect a lot of motivated sellers in the market who are willing to drop their price by single-digit or at least by 10 per cent as they will need the cash to finance themselves or require money to strengthen their cash position. Those are the people who will sell at a lower price,” he said.
“Since 2012, the property market has come down. Correspondingly, prices have also come down. We expected 2020 to be a better year with some positivity in the market but then the MCO happened. The situation could be there will be more sellers than buyers. I believe after the MCO is lifted it will be a buyers’ market and we can see some good things happening,” he said.
He advised real estate negotiators to interact more with their clients, expand contacts, acquire new skills and be prepared post-MCO.
Soma said they should also bring in more value to clients, through enhanced digital training and marketing.