PETALING JAYA: The Malaysian Institute of Estate Agents’ (MIEA) annual Real Estate Market Sentiment Survey 2022/2023 has revealed that the institute’s practitioners are bullish on the 2023 property market.

The respondents are real estate practitioners who are active in the market and importantly who know and understand what is happening on the ground. The survey was conducted during the MIEA Real Estate Negotiators (RENs) Summit, which was attended by 385 real estate professionals, on Dec 17 last year. The annual summit is dedicated to RENs to gather knowledge and skills. 

The survey revealed the sentiments of sellers, buyers, landlords and tenants throughout Malaysia in 2022 and their expectations for the market performance in 2023.  

Prospective buyers

On the number of enquiries received from purchasers through advertisements and marketing channels in the year 2022 compared to the corresponding period January to November 2021, the findings show that 41.7% said the enquiries from prospective purchasers increased.

A total of 24.3% of the respondents said the enquiries remained constant and 33.9% said they decreased.

“Enquiries are important as it reflects the interest of the property seekers which will eventually result in a showing of the property and the closing and it is a reflection on the demand. We are not surprised at the increase in enquiries as after the lockdown, the market opened up in the last quarter of 2021 and correspondingly the demand went up as movement became easy, people could look at properties again, more marketing and advertising activities took place, those who waited to invest could view properties, there was also a rise in the disposal of properties to whether the effect of the lockdown in some cases. 

“This trend followed through till December 2022 and we can reconcile with the fact that Q1, Q2 and Q3 National Property Information Centre showed that the volume of transactions in 2022 reached 293,206, an increase of transactions by 46.86% over the same period in 2021,” said MIEA President Chan Ai Cheng in a release from MIEA.

More enquiries expected

A total of 49.6% foresee an increase in the number of enquiries in 2023, with 31.3% expecting the situation to remain the same while 19.1% said it will decrease.  

“This can be attributed to the general feeling that the market will perform well in 2023 as there is greater stability in the country vis-a-vis the new government, steps taken to develop the economy and trying to place a lid on inflation. All these will help build confidence among end users and investors,” said Chan. 

63.5% of the respondents foresee a hike in the number of enquiries for 2023 while 25.2% said it will remain the same and 11.1% said it will decrease.

“Again, there is a general feeling that the rental market will perform better. The process is simpler, less upfront payments and shorter-term commitment are some of the reasons many are opting to rent instead of buying. Secondly, many young people are coming into the market choosing to rent first,” she said.

Meanwhile, enquiry levels from prospective tenants in 2022 increased with 55.7% of respondents confirming this hike. A total of 27% of respondents said the number remained constant and 11.3 % said it decreased. 

“This strong jump in the number of enquiries showed that after the MCO (movement control order), there is an increase in rental movements attributed to possibly: 

• Existing tenancies moving to other premises 
• Interstate movement for work 
• Extensions of tenancies 
• The high cost of new homes thus affecting affordability 
• Some sold their homes during MCO to realise their investment and thus renting in the meantime 
• Young professionals choosing to rent as to the uncertainty of the market In fact, renting properties is becoming popular these days.  

“It isn’t conclusive from this survey that there is a general move or preference from purchasing into renting. The data merely points that the number of enquiries in comparison to 2021 has increased,” said Chan.

Rental rate movement

The survey showed that 33.9% of the respondents revealed that the rental rate had increased by 10%-20% in 2022 and 42.6% said the rates remained constant and the rest said it decreased by 10%.

“There has been an increase in rental adjustments by about 10%-20%. This is acceptable as demand for rental properties went on the rise. However, a majority of respondents said that it remained constant. This again can be attributed to a majority of owners who would have wanted their premises occupied instead of keeping them vacant. The market was also in a recovery mode and landlords would have a subdued mindset to increase rental,” said Chan.

The projected adjustment to rental rates in 2023 - 35.7% of the respondents project an Increase of 10-20% while 47% said it will remain the same and 17.4% were of the opinion that it will decrease by 10%.

“A high percentage of them feel the rental rates will remain reflecting what happened in 2022. As stated earlier the market is adjusting itself and landlords will be wary to increase to attract tenants as having the premises tenanted to give them some returns is key. 

“Interestingly, 35.7% have the opinion that we will see an increase as properties in certain locations have greater demand and probably less supply thereby creating demand resulting in the rise of rental rates. A smaller percentage felt there will be a decrease of 10% and again that could be expected in locations where demand is low,” said Chan.

On the overall rental market in 2023, 67% of the respondents said it will be better than in 2022 and 25.2% said it will remain the same with the remaining respondents said it will soften.

The majority of the respondents feel that the rental market will perform better in 2023. This is expected as there is a rise in transactions, population growth, rise in employment and transmigration from rural areas to the city, an improved economy will all contribute to a better-performing rental market.  

Selling price

Movement in the price of properties is an important factor as it reflects the asking price by sellers. On the adjustment to the selling price in 2022 compared to 2021, 32.2% said the price increased by 10-20%, 29.6% said it remained the same and 38.3% said it decreased by 10%. 

Generally, the 38.3% who said the price decreased was largely due to the challenges faced during the lockdown. Property owners who were businessmen and employees were both affected as there was reduced income and in the job market, the loss of jobs and salary adjustments had a great impact. 

“A number had to sell their properties to make ends meet, to avoid mortgage payments and to keep themselves afloat. Adjusting the price is also to create urgency in sales as they could very well have tried marketing the properties above market price and have to adjust to be competitive.

“32.2% indicated that there was an increase in the selling price and this could be largely attributed to sellers of landed properties in strategic locations,” said Chan.  

Projected adjustment to selling price in 2023  

A total of 35.7% of the respondents believed that the price will increase by 10-20% in 2023 while 31.3% projected that it will remain the same and 34% said it would decrease by 10%.

“There is a common feeling that the price adjustment could be minimal as the market is recovering and there will be resistance to any price increase. However, we anticipate that there will be some adjustments in some pocket locations by owners who feel that their properties can demand higher prices. 

“There is also an equal feeling from 34% of the respondents that the price will decrease by 10% reflecting that in many other locations, the prices will see a slight drop. This can be accepted as purchasers will play a balancing factor in resisting price escalations and this is true in a recovering market,” said Chan.

Outlook of the secondary market

A total of 52.2 % of the respondents felt that the secondary market will grow while 31.9% said it will remain the same and 15.9% said it will see a decline.

“It is worth noting that close to 60%-65% of all transactions in the country are from the residential sector. Among these numbers also include project sales (primary market). Agents play a critical role in assisting developers in project sales. 

“As such, the bulk of the transactions are from the secondary market due to its volume all over the country. From a subdued market in 2020, 2021 and with an improving market, the secondary market is expected to grow,” the MIEA president said.

From the survey, 40.9% felt that the secondary market will grow while 30.4% said it will remain the same and 28.7% said it will decline. 

Chan said there is always good demand for new project launches as investors buy to realise their investment in 24 months for landed property and 36 months for high-rise either through resale or rental. This market is picking up and 40.9% felt that it will grow further in 2023. Further, it is easier to purchase new projects as the outlay is much less thereby attracting those first-time house buyers. 

Overall outlook

The survey revealed that 58.3% concluded that the market will improve in 2023. A total of 18.3% said it will remain the same while 23.5% said it will decline. Combining both project and secondary market sales, the respondents feel that the overall property market will improve. 

“In conclusion, we in MIEA feel the same as there is stability in the country. As long as the fundamentals vis-a-vis, the economy, interest rate, loan accessibility and employment rate, coupled with government support through incentives, the property market will grow. 

“In the last proposed budget, there was a lack of government initiatives to support the property market except for the B40 group. It is our call that the M40 group’s housing needs are also looked into and we request the new government under the able leadership of Datuk Seri Anwar Ibrahim, who has also placed priority on housing for Malaysians to include in the new budget some of the proposals made by MIEA in their budget proposal in 2022 to stimulate the secondary market. 

“We will continue to support all government initiatives on the property market. The market is to improve and our wish is that all stakeholders need to support its growth,” said Chan.

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