KUALA LUMPUR, Jan 1— Property consultancy Savills Malaysia sees the overall property market in the country “to be a direct extension of 2022” and that the bumpy ride will move into 2023 but with a stronger positive bias.
In a statement today, Savills said with the new government, hopefully, there will be better support for a strong landing.
Breaking the property market into different sub-sectors, the statement said older offices and retail properties are “likely to struggle” while newer properties in the industrial, logistics and data centre segment will “continue to be in the limelight” of market activities.
Group managing director/head of Savills Malaysia Datuk Paul Khong said the consultancy awaits the new Budget 2023 with anticipation for measures to rejuvenate the entire sector and not just goodies for those in the bottom 40.
Nonetheless, he acknowledged that construction costs and higher loan rates have dampened the real estate sector and the overall domestic economy.
“We have seen a major cost-push (effect) on new developments. These new products will eventually result in a higher price tag,” the statement said.
In the residential property segment, the statement said demand will be “resilient” and this will be evidenced by improving sales in the first to the third quarter of 2023 due to the pent-up demand.
The statement said there will be those who will continue to take advantage of the “still-low” mortgage costs, said Khong.
Nevertheless, he noted that challenges are there as Bank Negara Malaysia (BNM) may raise the overnight policy rate (OPR) above the pre-pandemic level (3.25 per cent – 3.50 per cent) depending on the global situation. At 3.25 per cent, the OPR will be back to pre-pandemic levels.
The benchmark interest rate now stands at 2.75 per cent, after four consecutive hikes of 25 basis points from 1.75 per cent at the start of 2022.
The rising cost of buying a house could impact the purchasing power of potential buyers in the coming years, he added.
Savills also sees a global trend in environmental, social, and governance (ESG) issues being embedded deeply into investment decisions. This awareness is also growing in Malaysia,” Khong said.
— Bernama
