PROPERTY MARKET REMAINS RESILIENT IN 2024

KUALA LUMPUR, Dec 17 (Bernama) --Malaysia's housing market, and by extension the property sector, remained resilient and stable throughout 2024 supported by brisk demand and new projects, reflecting investor confidence.

According to the Malaysian House Price Index, the average home price stood at RM475,126, with a modest 0.4 per cent rise from a year ago, underscoring the market's stability amid global economic uncertainties.

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Juwai IQI co-founder and group chief executive officer (CEO) Kashif Ansari told Bernama that residential properties played a pivotal role.

"Residential transactions accounted for 50 per cent of the total value and 63 per cent of the volume of all real estate transactions so far this year," he said.

Optimism among developers was palpable, with over 32,000 new landed and high-rise homes initiated in the third quarter (3Q)  - a substantial 50 per cent jump from 2Q.

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Kashif added that developers are not only starting new projects but also delivering completed houses steadily, ensuring a balance between supply and demand.

“The market maintained a measured pace of growth, signalling confidence and the potential for continued expansion,” he said.

The data reflects a year of measured progress for Malaysia’s property market, setting a strong foundation as the sector heads into 2024, Kashif said.

"They delivered nearly 24,000 homes in 3Q 2024, similar to the previous quarter," Kashif told Bernama.

Juwai IQI expects the housing market to remain relatively stable in 4Q, he said.

 A predictable market with stable rates and prices makes it easier for consumers to research their purchases, he said.

According to National Property Information Centre (NAPIC) data, 3Q 2024 reported slight increases in both volume and value of housing transactins, with 70,520 units recorded (3Q 2023: 68,561 units) worth RM28.74 billion versus RM28.36 billion a year ago.

Overall, the property market performance strengthened with the number and transaction value expanding by 3.1 per cent and 0.3 per cent, respectively.

This comprises 112,305 transactions valued at RM57.31 billion, against 108,993 transactions worth RM57.14 in 3Q 2023.

Valuation and Property Services Department (JPPH) Director-General Abdul Razak Yusak said 3Q 2024's improved performance was due to positive growth in transaction numbers in all subsectors.

Additionally, the momentum in the unsold complete units, known as overhang properties, eased to 21,968 units valued at RM13.85 billion versus 22,642 units worth RM14.24 billion in 2Q 2024.

Despite ongoing global economic challenges, Abdul Razak said several infrastructure projects are expected to catalyse economic growth and stimulate the property market.

This includes the Rapid Transit Link (RTS) project in Johor, industrial projects in the northern region, the Pan Borneo Highway in Sabah and Sarawak and the East Coast Rail Link (ECRL).

Government's Efforts on Affordable Housing

To boost house ownership, the Housing and Local Government Ministry implemented various initiatives, including the Housing Credit Guarantee Scheme, whereby the government guarantees financing up to RM500,000 for first-time homebuyers, targeting those without a fixed income and those from low- to middle-income groups.

Additionally, the Home Ownership Campaign 2.0 offers stamp duty exemptions on transfer and financing agreements for first-time buyers of units valued up to RM500,000 until Dec 31, 2025.

Its minister Nga Kor Ming reported that a total of 25,903 housing units under the National Housing Corporation (SPNB) were sold as of Sept 30, with young people owning 19,909 units, or 76.9 per cent.

He also noted that 44,983 units or 65 per cent of the 69,205 affordable housing units were owned by youths.

Additionally, 25,030 of 41,671 units, or 60.1 per cent of affordable PR1MA units were owned by young people, excluding PR1MA joint venture projects.

Addressing Challenges

While building affordable housing remained a focus for most developers, they said rising costs ranging from a few per cent to 15 per cent from a year ago, and higher financing costs have squeezed margins.

The increase is especially significant for earthworks and infrastructure-related materials. 

Rising transportation and supply chain-related costs have also led to higher development costs. The rise in the sales and service tax (SST) to eight per cent, implemented earlier this year, from six per cent caused further hardships.

Property companies navigated a mixed landscape with moderate growth, balancing cost pressures and cautious demand in the residential sector this year while commercial properties showed signs of recovery but face longer-term structural challenges.

Real Estate and Housing Developers' Association (Rehda) Malaysia president Datuk Ho Hon Sang said that based on its survey, 84 per cent of respondents were impacted by economic conditions in the first half (1H) of 2024.

This prompted them to implement cost-cutting measures which include freezing recruitment, reducing staff benefits and delaying or scaling down project launches.

Despite this, Ho said 44 per cent of respondents planned to launch projects in 2H 2024, focusing primarily on landed properties, which continue to see higher demand versus high-rise developments.

To boost sales, developers would offer assistance with down payments (covering the first 10 per cent), increase their use of digital marketing and virtual technologies and provide discounts to buyers, averaging eight per cent.

Outlook for 2025

Ho said developers are more optimistic about 1H 2025's outlook versus 2H 2024, which was driven by carry-forward transactions from the previous year and rising building material costs.

Nonetheless, developers are adopting a cautious, wait-and-see approach to assess what lies ahead, following the proposed Urban Redevelopment Act, which may impact the sector positively next year. 

Another much-awaited change is the amendment to Act 118, which has been announced to be tabled next year by the Housing and Local Government minister.

Meanwhile, Juwai IQI's Kashif expects a strong 2025 with manufacturing, technology exports, construction, and services driving consistent growth.

Stable interest rates and broad-based growth will position Malaysia for steady progress in 2025, he said.

"Rates are important because when they remain stable, so will borrowing costs for mortgages and development financing. This means that existing loans with floating interest rates will not see significant changes, which is good for household finances and the industry," he said.

It expects two themes to dominate the residential market in 2025, mixed-use integrated townships, and affordable housing.

Large-scale developments combine residential, commercial, retail and recreational spaces, providing access to transportation, shopping, restaurants and parks, making it easier to get to schools and workplaces.

As for affordable housing, the government is making a concerted effort to increase and improve supply.

According to the Housing and Local Government Ministry, the new Residensi Rakyat Programme (PRR), to be built starting next year, is expected to provide more conducive housing with emphasis on accessibility, connectivity, sustainability, livability and mobility, complete with public facilities.

Budget 2025 also saw the Madani Deposit scheme, a reintroduction of the previous MyDeposit Scheme and My First Home Scheme to help first-time house buyers with a RM30,000 deposit.

"Everyone should have access to decent and affordable housing. The government's focus on affordable housing should lead to the construction of more social housing and units priced below RM300,000," Kashif added.

-- BERNAMA