Three years after first MCO, house buyers still looking for pandemic bargains

Three years after first MCO, house buyers still looking for pandemic bargains 

By: Yip Wai Fong

While the Covid-19 pandemic of 2020 – 2021 was a dark period for the real estate sector, some certainly saw a glow in the darkness. Plunging demands cracked open a rare buyers’ market for those who have deeper pockets than others to net choice properties at steep discounts. 

But home hunters should be wary that times are again changing, with the price of homes shifting back towards pre-pandemic levels. 

“Bungalows at the Tropicana area with land sizes of 8,000 sq ft – 10,000 sq ft and built-ups of 6,000 sq ft – 8,000 sq ft were being sold at RM3.5 to RM4.5 million during those days. Similar properties were transacted in 2019 for close to RM6 million,” explained Gather Properties team manager Vincent Liaw. 

“Today, prices have recovered to about RM5.5 million. We are still receiving a good number of enquiries but transaction is certainly not as strong as in the past,” he added. 

Liaw, who specialises in the secondary market of Tropicana Golf and Resort and its surrounding area, including Ara Damansara and Kota Damansara, said buyers are mostly owner-occupiers who wished to have more spacious homes after experiencing several rounds of Movement Control Orders (MCO). The secondary market is almost the default market for landed properties in Liaw’s coverage area since there has not been any new launch. 

“Sellers, on the other hand, were either those who needed to unlock the value of their properties for cashflow, or retirees who wanted to downsize to high-rise homes nearby. The market was such that we had buyers as young as 30s or 40s, for the bungalows,” said Liaw. 

Liaw added that terrace houses remained the most demanded type of property even to this day. With prices recovering and construction costs soaring, deals have slowed compared to 2020 – 2021. 

“The asking price for terrace houses in Ara Damansara during 2020 – 2021 used to be in the RM700,000 – RM900,000 range. Now it has recovered to RM1 – RM1.2 million,” he explained. 

HOC a jolt for primary market 

With the Home Ownership Campaign (HOC) in force from 2020 to 2021, bargain hunters at the primary market were akin to being handed their wish list with all the items checked. They were entitled to either full or partial stamp duty exemptions, house price discounts and other developer offers on top of the HOC. However, the HOC applied to primary market buyers only. 

“It was a great boost for the market during the trying period,” said Forward Realty senior project director Cindy Lee, who specialises in new projects at Bangsar, Bangsar South and Damansara Heights. 

Similar to Liaw, who covers affluent areas, Lee’s buyers also were looking for spacious homes albeit for high-rise developments and have continued to be so. 

“Most of them are owner-occupiers and want three bedrooms or more. So the homes would be at least 1,200 sq ft,” she said. “Many of the buyers are upgraders, with a mixture of small or bigger families.” 

“Homes that offer more resort-like facilities or design or have more green area or green landscape also tend to attract more interest and enquiries,” she noted. 

Lee expressed hope for a campaign similar to HOC to drive sales this year. “2023 is not picking up yet in terms of transactions, compared to last year. We are hoping that it will be in the second half of the year. We hope that there will be a campaign like the HOC,” she said. 

Firdaus & Associates group manager Hafezul Latif concurred with Lee about HOC being an effective incentive for house buyers to make the purchase decision during 2020 – 2021. Specialising in various government affordable homes schemes as well as the sub-sale market in Klang Valley, he said inventories that moved quickly during the period were priced at RM300,000 and below. 

“After 2020 – 2021, prospective buyers are enquiring about homes priced at RM300,000 to RM400,000. They expect the net price to be at RM250,000 to RM350,000 so that they can have zero–down payment,” he said. 

“Buyers will try to get the best for pricing, locations and sizing among the affordable schemes. For example, Rumahwip units are preferred for being located closer to the city centre, in areas such as Cheras, Bandar Sri Permaisuri and Sentul. PR1MA homes, although not as near, are popular because the units are both spacious and affordable,” he added. 

“Buyers are young families or singles who have plans to get married not long after. Many of them prefer a co-working space in their development’s facility list,” he pointed out. 

Buyers holding back

“Right now, buyers are still monitoring the market and waiting to see whether the government will announce an initiative to help property hunters,” Hafezul said. “I’m also worried about the impact of the discontinuation of the My First Home Scheme (on April 1) and the latest hike in OPR (announced on May 3) on the market.”

With prices and other factors continuing to normalise to pre-pandemic level, Liaw said he is doing more to educate his prospective buyers to seal the deal before it is too late. 

“I’m telling them, if you don’t act soon, the prices will keep rising,” Liaw said. “But some prospects are still asking for lower prices from sellers. They are still looking for deals that were found during the pandemic times.”

However, now that these buyers found themselves being governed by a new administration that prioritises inflation fighting, it is likely that their window for bargain hunting will close soon.

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