The Covid-19 pandemic has impacted the demand for all building types in Kuala Lumpur, says Premendran Pathmanathan, general manager of customer data solutions at REA Group Asia.
There was a negative demand for terrace houses, Pathmanathan said when presenting the first half of 2020 (H1 2020) portal demand analytics recently.
“This contrasted sharply with the first half of 2019 (H1 2019) when a terrace house came out tops in terms of capital growth and was the only building type to record a positive value growth. Similarly, condominiums and service residences recorded a significant decline in demand and capital growth.
“Nevertheless, the overall sub-sale property demand in the capital city recorded only a marginal decline of -0.3 per cent in H1 2020. Both user visit and property listing numbers for Kuala Lumpur property only dipped slightly below the positive trend line,” Pathmanathan said when presenting portal demand analytics for H1 2020 here recently.
The analytics also revealed that Selangor was the only major state with a positive demand of +3.5 per cent and with an overall increase in visits when compared year on year.
While other major cities in Malaysia recorded a negative demand for houses, Shah Alam, the state capital of Selangor had a demand figure of +7.63 per cent due to its considerably affordable properties on the outskirts of Klang Valley.
Pathmanathan said that in Selangor, housing demand in H1 2020 shifted to smaller cities and suburban areas such as Puncak Alam, Dengkil, Semenyih, and Cyberjaya.
He said this trend is spurred by the search for larger homes which was brought about by the remote working trend which snowballed after the MCO.
There was a minor setback in Penang with sub-sale property demand declining by -6.5 per cent in H1 2020 as the Movement Control Order (MCO) and the closure of both state and international borders severely affected its tourism industry, translating to the lower search or purchasing interest among overseas investors.
Meanwhile in the northern state property demand recorded a downward trend across all three property types in H1 2020.
“On the positive side, terrace house prices in the mainland are still lower compared to its island counterpart, which means the capital growth potential of mainland homes could increase over time. As for Johor, the property market in the state has been sluggish even before the Covid-19 outbreak and it remained subdued in H1 2020,” Pathmanathan said.
Pathmanathan said the southern state had the highest property overhang in the country and the narrowing user visits coupled with an influx of listings have lowered property demand by -22.8 per cent.
The closure of the Johor-Singapore border during the MCO could have dampened user purchasing sentiment and this could have contributed to the double-digit drop in H1 2020, he said.
“It is worth pointing out that the effect of the pandemic on the property market is not as dire as what we initially thought. When Covid-19 first hit Malaysia, we experienced a reduction in user visits and property listings during the initial stages of MCO. However, user visits have since recovered following the implementation of Conditional MCO and by the end of the first week of June, organic searches for sub-sale property listings saw an upward recovery of +41 per cent,” he said.