KUALA LUMPUR – The sharp surge of COVID-19 cases has caused the country’s healthcare system to be at a breaking point. This has led the Government to announce a movement control order (MCO) nationwide until February 18, 2021.
PropertyGuru has revealed an increase within its property sentiment index, from 39 points (H2 2020) to 42 points (H1 2021). Contributing factors include current real estate satisfaction, positive outlook on property climate, favorable interest rate environment, positive government efforts and favourable price outlook.
Although with a slight uptick in sentiment, Malaysians are still realistic but cautious about property purchase, with 42% adopting a wait-and-see approach in anticipation for a better deal in the future.
On the other hand, a total of 35% of the respondents (mostly aged between 22 – 29 years old) have expressed interest in owning a property as they see opportunities in the current favourable environment, and spurred by historically low-interest rates, incentives from the extended Home Ownership Campaign (HOC), as well as attractive prices and packages offered by developers.
The COVID-19 pandemic has also jeopardised the financial strength and job security of Malaysians, which in turn affects property buying decisions.
Entrepreneur and Cooperative Development Minister Datuk Seri Wan Junaidi Tuanku Jaafar revealed that over 30,000 businesses have shut down last year since the start of the pandemic. 99,696 workers were also laid off between January and November 27, 2020, due to the spread of COVID-19. For those who can keep their jobs, many are seeing salary cuts due to the challenging market environment.
52% of the respondents said the difficulties in forking out the down payment for the property purchase remains the main barrier that stops them from applying for a home loan.
Meanwhile, job instability (46%), unfamiliarity with paperwork (33%), poor credit history (27%) and lack of supporting documents (25%) are the top five barriers in taking a home loan.
2021 Market Outlook
In reviving the country’s economy, the Malaysian government had allocated the largest national budget at TM322.5 billion to spur economic growth. Over 500,000 new jobs for Malaysians are also expected to be created within the next two years.
Despite the short-term pain during times of uncertainties, it is believed that after the mass vaccination program is underway, Malaysia’s economy will be on the mend with forecasted improvements within the property sector in H2 2021.