APPD Market Report Article
Kuala LumpurAugust 26, 2022
YY Lau, Country Head, Malaysia
Developers offer attractive discounts to encourage sales
- As the Home Ownership Campaign (HOC) and other financial easing policies have ended, the pre-pandemic upfront payment requirement is again needed to purchase a house, thus setting a higher barrier to ownership.
- To entice buyers, some developers have offered incentives such as rebates from 5%-25%, waiving legal fees, offering a free one-year maintenance fee, and so on. Fully-furnished units were offered less compared to previous years, to keep the price per unit low.
Within the quarter, 1,442 units reach completion
- Two projects, Pavilion Embassy and Eaton Residence, completed in the quarter, adding 1,442 units to the stock. One project, The Cedar, with a total of 70 units, was launched during the quarter.
- Seven projects comprising 1,808 units, which were expected to be completed during the quarter, were postponed due to shortage of labour, which resulted in slower construction progress.
Price continues to drop due to large number of units for sale
- Investment sentiments improved slightly as investors who previously put their investment plan on hold start to jump back into the market.
- Investment activities are further encouraged by the slight drop in capital values. Currently, investment activities are mainly driven by the local investors.
Outlook: Drop in prices to materialise due to pricing recalibration
- Rental demand is expected to increase as renting represents an ideal interim option for those who have temporarily put off purchasing plans until the overall economy situation improves.
- With the absence of the loan moratorium, capital values are expected to drop marginally, pressured by the mismatch in selling prices and current buyer appetite, and large number of units to be put up for auction.