By Joseph Wong
Amidst the backdrop of escalating construction costs and the pervasive impact of inflationary pressures on the prices of goods and services, the inevitable consequence of rising property prices has become increasingly apparent. As economic forces continue to exert their influence on various sectors, the real estate market has found itself caught in the crosscurrents of these macroeconomic trends.
From materials and labour to operational expenses, every facet of the construction process faces upward price pressures, compelling developers to recalibrate their pricing strategies. Concurrently, consumers will have to come with the sobering reality of navigating a landscape where the cost of living steadily climbs. In such a milieu, the trajectory of property prices reflects not only the intricate interplay of market forces but also the broader economic dynamics shaping our contemporary society.
“The average subsale sales price across Malaysia in the first quarter of the year was RM521,614 and the new unit price was RM582,887. Those average prices are slightly higher than NAPIC’s (National Property Information Centre) 2023 house price, which was RM467,144. We believe the difference lies in the mix of property tracked and in the slightly different timeframe,” said Juwai IQI co-founder and group chief executive officer Kashif Ansar.
This information is based on the latest Residential Sales Market Report for Malaysia by IQI, part of the Juwai IQI proptech group, which analysed over 70,000 residential sales since 2018, shedding light on key trends, particularly regarding sales prices and housing affordability.
Most expensive states
“It is no surprise that Kuala Lumpur has the most expensive property in the country. The average subsale home price in Kuala Lumpur is RM801,557. New homes are somewhat more affordable, with an average price of RM708,462. After Kuala Lumpur, the three most expensive states for subsale homes are Kuala Lumpur, Sarawak, Sabah and Johor. The next three most expensive states for new home sales are Johor, Sabah, and Kedah,” revealed Ansari..
Terengganu is the least expensive state for subsale homes, with an average price of RM293,714. After Terengganu, the next least expensive states for subsale homes are Perak, Kedah, and Pahang. In the first quarter, Melaka was the least expensive state for new units. The average price of a new unit home in Melaka is RM305,463. After Melaka, the next least expensive states in which to buy a new unit are Pahang, Perak, and Kelantan.
Most transactions within buyers’ means
The majority of purchases tend to fall within the lower price brackets. In the first quarter, just over half of new unit buyers spent RM500,000 or less while only about a quarter paid more than RM750,000 for their new unit.
A similar distribution is observed in the sub-sale market, where nearly half of buyers spent RM500,000 or below. This trend signifies positive news for affordable home seekers, as it indicates a plentiful supply of appealing homes in the market for medium- and low-income earners.
Overall, the market is well-balanced, with sufficient supply to meet the demands of buyers across all price ranges, said Ansari.
“The average interest rate for a new housing loan was 4.2% at the end of the year, according to Bank Negara. We calculated how much a buyer of an RM300,000 home would have to pay every month. If a buyer puts down RM30,000 on a RM300,000 home, their monthly mortgage expense would be RM1,228 per month. That makes buying an affordable home significantly cheaper than the average rental, which is RM1,975,”he said.
“Buying an affordable home would save you RM747 per month compared to paying the average rent. The data on monthly expenses can help buyers understand their financial position when considering the purchase of a home. You need to know your budget when assessing long-term affordability and pay-off amidst fluctuating economic conditions,” he added.
As there remains a steadfast belief that the ownership of a home stands as the most expedient avenue toward achieving financial security and independence among a considerable segment of the Malaysian populace, it is important that policies and initiatives are implemented to ensure accessible pathways to home ownership, thereby empowering individuals to secure their financial futures and bolster overall economic stability.
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