“Is The Residential Property Market Really Recovering?” Part 3/3
PropertyGuru Malaysia has today released its Malaysia Property Market Report (MPMR) Q3 2022, powered by PropertyGuru Data Sense, which revealed:
An expected trend of gradual improvements – with the overall demand index moving upwards by 7.93% QoQ, despite being in negative territory in the previous quarter.
Continued increase of rental demand – Q2 saw an increase of 12.89% QoQ and 96.83% YoY, as many Malaysians have halted making large purchases amid economic recovery.
Landed properties continue to outperform high-rise properties in the sales markets – Landed Sale Price Index moving upwards by 1.32% QoQ and 5% YoY as home buyers prefer larger living areas.
🤠's Dua Sen: Those nice folks at PG Datasense are talking about a nascent recovery in demand for both property transactions and rentals. See chart of the Rental Market Index above for Q3 2022.
As a former professional stock picker aka investment analyst I am not persuaded by datasets using MEDIAN "asking prices". I prefer to see a recovery in actual property transactions prices and rentals in PSF. Asking transaction and rental prices don’t ALWAYS correlate to actual buying interest or actual rentals in the future.
I concede PG Datasense might be right when they are talking higher median asking property transactions price or rentals in PSF might signpost nascent recovery in property market segments in Ulu Kelang or Puchong, aka those segments that are dependent mainly on locals.
These property market segments do not depend on a dwindling pool of expat tenants or foreign buyers from China and Red Dot Island unlike the KL high end condominium market that remains in the doldrums. See also my post “Will A Slowdown In China's Property Sector Affect Malaysia?”
The evidence from 2022 KL high end condominium auctions is telling me a different story. Many 5* KLCC Luxury Condominiums have no bids at their second or third auction outings. To me this suggests a lack of buying interest by high end property investors.
Some auction property prices for KL luxury condominiums have now reached BELOW RM500 psf. Recently my auction agent J sent me via WhatsApp notices of two upcoming auctions at The Capsquare Residences and the Cendana which fall below RM500 psf.
Perhaps the good folks at PG Datasense might want to ponder this:
If the property market is recovering, why are auction prices for some 5* luxury condominiums in KL trending lower?
Why not show the indices for KL high end condominiums for asking property transactions prices and rentals like Nawawi Tie & Frank Knight?
Post Script
You can download PropertyGuru's MPMR Q3 2022 below by double clicking the figure below:
