When it comes to property outlook, the best way to get an insight from the developments of the industry will have to come from a developer better still if they have are the biggest and most exposed. In this sense, Mah Sing an iconic property developer with numerous well-known projects has given an observatory view of how the industry will fair in 2022.
Overall Mah Sing is cautiously optimistic about the property prospects in the medium to long term, citing robust demand for properties due to the young demographic. The impact of the epidemic has had an influence on the property market in Malaysia over the last two years. This has resulted in a change in consumer patterns and new challenges for property players. The Group foresees that the pace of revival can quicken, providing global and domestic economic growth is stable. This article forecasts how the market will perform next year and the property trends to watch out for in 2022, based on the Mah Sing Group’s 2021 property take-up rate.
The impact of economic growth on employment
The overall health of the economy is the most important element that influences the value of the real estate. According to Bank Negara’s report, the Economic and Financial Developments in Malaysia in the Third Quarter of 2021, the domestic economy is on track to expand by 3.0% to 4.0% in 2021. Bank Negara also predicts a positive growth rate of 5.5 percent to 6.5 percent in 2022. In addition, the Department of Statistics Malaysia published the Key Statistics of the Labor Force in Malaysia (October 2021), which stated that the upward trend of employed people continued in October 2021, with an addition of 0.6% month on month, or 91.1 thousand people, to 15.55 million people (September 2021: 15.46 million people). Moreover, a better economic outlook is also anticipated in the upcoming months, indicated by the stronger growth of the Leading Index (LI) as compared to the previous month. Similarly, a positive business situation is foreseen for the six months ahead, as reported in the Business Tendency Statistics. Employment in a variety of industries, including hospitality, airlines, tourism, and corporate, may begin to increase. To some extent, this will help improve purchasing power in the real estate sector.
As the economy has only just gradually recovered, the Group also intends to help the people by offering its affordable range of development. Mah Sing’s Founder and Group Managing Director, Tan Sri Dato’ Sri Leong Hoy Kum said, “the Group aspires to be Malaysia’s leader in affordable housing, continuing to provide reasonably priced homes with premium features in strategic areas to meet the country’s expanding demand. By creating the “reinvent affordability” campaign, it encourages customers and homeowners to be prudent in their property purchase and do not overstretch their finances.” Referring to the Bank Negara Malaysia’s Financial Stability Review First Half 2021 report, the results indicated that properties priced below RM500,000 accounted for more than 80% of housing transactions. “Our M Series segment offers generally from 700 sqft onwards with indicative selling price from RM318,000. Hence, we believe that our product range is in line with the market demand.”
The resurgence of the homebody
The pandemic has undeniably pushed the homebody economy into the mainstream. People are now able to work, manage businesses, and study from the comfort of their own homes. With that being said, the new norm culture is in line with Mah Sing’s vision to reinvent and enhance modern-day Malaysian living. The Group has already begun incorporating design elements that are appropriate for the new standard. For example, some of its properties provide a dedicated workspace within the residence, a conducive co-working environment with a community-driven atmosphere.
Rental market poised to bounce back
Rental demand is likely to increase next year as a result of the opening of travel borders, with more foreign expats, business partners, tourists, and foreign students contributing to total growth. Rental demand in the Klang Valley has grown from -2.9 percent in H1 2020 to +2.6 percent in H1 2021, according to iProperty’s H1 2021 Portal Demand Analytics (Residential Rental Market). Many renters in Kuala Lumpur are looking for condominiums and serviced residences sized between 1,000-1,200 sqft and priced between RM1,500-RM2,000. Having said that, this can be beneficial for homebuyers who are wanting to buy a house as an investment.
Ultimately, the property market looks to be experiencing a revival as we move into 2022. We will continue to ensure that our products are aligned with market sentiment and meet the pent-up demand for affordable housing. The Group intends to continue leveraging the strengths of its existing digital market platforms to boost sales by streamlining processes from awareness to payments. Moving forward, the Group will pursue to strive for excellence in its management and operations.
One of the best lessons that we can all learn from the pandemic is a renewed commitment to resiliency.
-Group Managing Director, Tan Sri Dato’ Sri Leong Hoy Kum