Property Demand Shrunk By 2.5% During MCO But Subsale Bounced Back During CMCO, Says iProperty
Demand for apartments, condos were negatively affected by MCO.
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The 8 weeks of the Movement Control Order (MCO) has impacted the overall national property demand for the first half of 2020 by 2.5% but the secondary market has seen a resurgence during the Conditional Movement Control Order (CMCO) based on stats by iProperty.
It is worth pointing out that the effect of the pandemic on the property market is not as dire as what 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 Movement Control Order (CMCO) and by the end of the first week of June, organic searches for subsale property listings saw an upward recovery of 41%
General Manager for Customer Data Solutions & Quality, REA Group Asia Premendran Pathmanathan
Although consumers were cautious during the MCO, General Manager for Customer Data Premendran Pathmanathan said that government initiatives that were rolled out to reduce the impact of Covid-19 on the rakyat will also help the property sector.
He said announcements such as the Economic Recovery Plan (PENJANA) package could not have come at a better time with market activities falling sharply as a result of the MCO.
The stamp duty exemption under the Home Ownership Campaign (HOC), the relaxation of Real Property Gains Tax (RGPT) for home sellers, and the higher Loan-to-Value (LTV) ratio should also help to uplift the property sector in the coming months.
General Manager for Customer Data Solutions & Quality, REA Group Asia Premendran Pathmanathan
Compared to the same period last year, the demand for service residences has shrunk by -7.2% while demand for condominiums remained negative with user visits and property listings declining for both.
Similarly, median prices and capital growths for these two property types have also gone down in tandem with the COVID-19 outbreak and the mobility restriction caused by the MCOÂ in Q2 2020.
This decline, according to the portal, is attributed to consumer sentiment over future uncertainties such as loss of income and sudden changes in lifestyle, priorities, and personal circumstances.
Despite both categories experiencing a decline, user visits and property listings for terrace homes grew in H1 2020 with a capital growth of +2.21%.
It’s the only property type with a positive capital growth within the same time period.
The portal also noted that property listings growth has overtaken user visit growth, resulting in a -3.3% decline in overall demand.
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