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PETALING JAYA: The Malaysian housing market is holding steady despite uncertainties and is expected to moderate by H1’23 of which prices will appreciate but sales volume decrease, according to PropertyGuru Group’s Real Estate Intelligence report entitled Southeast Asia: Macro Economic Trends and Impact on the Residential Market (Oct 2022).

PropertyGuru Group’s Real Estate Intelligence head Dr Lee Nai Jia (pic) said the resulting turmoil from the Ukraine war in global markets had shaken investor confidence, though there is still some encouraging news in the Southeast Asian region residential housing market.

“Despite uncertainties in the global outlook, Thailand, Indonesia and Malaysia are showing increasing demand, with the latter two showing higher asking prices or listing prices,” he said.

Lee pointed out that the return of confidence following post-Covid lockdowns and the easing of restrictive measures bringing some relief, coupled with strong labour markets that support a robust housing market, as well as the steady flow of foreign direct investments (FDI) into Southeast Asia, does provide a buffer against market vagaries caused by the pandemic and war.

In Q2’22, residential markets in Malaysia, Singapore, Indonesia, and Vietnam logged an increase in prices, even though sales in Singapore and Vietnam are slowing. In Thailand, while the prices of homes remained conservative, there has been a surge in demand that implied a possible recovery in the market.

“There has been a general rebound in Malaysia, Singapore, Indonesia, Thailand and Vietnam that followed the reopening of borders and more relaxed measures associated with curbing Covid.

“The factors supporting the growth of the Malaysian market are: Malaysia and Vietnam both recorded the highest GDP increase, at about 8.9% and 7.7% y-o-y respectively in Q2 of 2022,” said Lee.

As economies returned to pre-pandemic levels, labour markets tightened across all five economies in Q2 which led to better financial positions that in turn facilitated the maintenance of mortgage payments and the ability to raise asking prices.

In terms of attracting foreign investments, the Southeast Asian region continued to be a magnet for FDI, which directly supported job growth and enabled economies a quicker rebound from the pandemic-led slowdown.

“Malaysia maintained its position as an investment magnet, attracting US$28 billion (132.16 billion) in H1 of 2022, of which US$17.7 billion came from the service sector.”

Going forward, and barring any more major shocks to the economy, economic growth for Malaysia, Singapore, Indonesia, and Thailand is expected to moderate in H1’23, while Vietnam is forecasted to experience economic expansion.

The interest rate increases due to inflation have created tighter financial conditions, but it is not all doom and gloom for the Southeast Asian residential property market.

“In fact, Malaysia, Singapore, Thailand and Vietnam residential markets continue to display resilience, as established by PropertyGuru’s proprietary indices,” said Lee.

However, he added that both residential markets in Malaysia and Indonesia will transit to the quadrant where prices appreciate, but sales volume decrease in H1’23.

“Those from the low-to-middle income households might be priced out of the market as most homeowners would only be willing to sell should their asking prices be met,” he added.

This year 69% of respondents have indicated plans to buy a home if the Home Ownership Campaign is revived, based on PropertyGuru’s Consumer Sentiment Study (CSS) for Malaysian buyers in H2’22.

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