Contributed By Sheldon Fernandez, Country Manager, PropertyGuru Malaysia
The slowdown in gross domestic product (GDP) growth to 4.3 percent is well below earlier estimates of 4.8 percent, and more recent projections of 4.5 percent. This is in line with our neutral outlook for property this year, with strong macroeconomic headwinds.
Slower economic growth translates to reduced accumulation of wealth, which is a prerequisite for home ownership.
As such, we anticipate further impacts to home seeker sentiment, though this may be buffered to some extent by Bank Negara Malaysia’s (BNM’s) timely Overnight Policy Rate (OPR) revision.
It should be noted that GDP expansion does not directly correlate to growth in the property market, with the latter influenced by other factors such as urbanisation, construction and demographical trends, typically following a cyclical pattern. However, the truism that a rising tide lifts all boats – as well as its inverse – applies.
Finally, while the recent global outbreak of the novel 2019-nCoV coronavirus strain has impacted supply and markets elsewhere, we see no direct impact on Malaysian property to date, though increased interest in domestic properties from international purchasers is possible in coming quarters, particularly in Penang.