iProperty.com.my’s bi-annual H1 2020 Property Demand Analytics revealed a drop-in capital growth figures in the major cities during H1 2020. Kuala Lumpur City Centre saw the biggest decline at -7.07 percent, followed by Georgetown with -5.42 percent, Petaling Jaya by -2.59 percent, Johor Bahru by -1.73 percent, and Shah Alam by -1.11 percent.
The analytics provided an overview of sub sale property demand using iProperty.com.my’s user visits and property listings data for sub sale properties in Malaysia with a particular focus on the four cities.
The Covid-19 had negatively impacted demands for all building types in KL, most noticeably the demand for terrace houses. This contrasted sharply with H1 2019 when the terrace house came out tops in terms of capital growth and was the only building type to record a positive value growth.
Similarly, condominiums and service residences recorded a significant decline in demand and capital growth. Nevertheless, the overall sub sale property demand in the capital city recorded only a marginal decline of – 0.3 percent in H1 2020.
Selangor came out as the only major state with a positive demand of +3.5 percent and with an overall increase in visits when compared year on year. Selangor state capital, Shah Alam had a demand figure of +7.63 percent due to its considerably affordable properties on the outskirts of Klang Valley.
Additionally, Selangor’s housing demands in H1 2020 shifted to smaller cities and suburban areas such as Puncak Alam, Dengkil, Semenyih, and Cyberjaya. According to the analytics, this trend is spurred by the search for larger homes which was brought about by the remote working trend which snowballed after the MCO.
Penang on the other end saw a minor setback with sub sale property demand declining by -6.5 percent in H1 2020 as the MCO and the closure of both state and international borders severely affected its tourism industry. Property demand in the northern state recorded a downward trend across all three property types in H1 2020.
Terrace house prices in the mainland however, are still lower compared to its island counterpart, which means the capital growth potential of mainland homes could increase over time.
The property market in Johor has been sluggish even before the Covid-19 outbreak and it remained subdued in H1 2020. The southern state has the highest property overhang in the country and its narrowing user visits coupled with an influx of listings have pushed the property demand down by -22.8 percent.
“The closure of the Johor-Singapore border during the MCO could have dampened user purchasing sentiment and might also have contributed to the double-digit drop in H1 2020,” said Premendran Pathmanathan, General Manager of Customer Data Solutions at REA Group Asia.