Property market to grow more slowly this year
Siva Shanker, chief executive officer of property consultants Rahim & Co International Sdn Bhd noted that while the idea of huge growth does sound (more) appealing, he cautioned that it is not always sustainable.
'For this year, we are projecting decent growth in a best-case scenario, but it will most likely be flat,' he told StarBiz.
Siva acknowledged that the property market has seen high levels of growth over the years, emphasising, however, that this was 'a thing of the past'.
'I don't think growth will go up and down significantly like before. I think the growth will be tiny, but it will also be sustainable. The waves will be lower and longer, which is a good market to have. Any slowdown that we face, it won't be severe.'
'It is a sign that the market is maturing and not giving in to speculation; and that real estate is a long-term play.'
Similarly, PPC International Sdn Bhd managing director Datuk Siders Sittampalam also expects the real estate market this year to be 'flattish'.
'I think this year is going to be flat. There's not going to be any major excitement or decline in terms of sentiment.'
According to the National Property Information Centre, Malaysia's property transaction value fell 8.9% in the first quarter of this year (1Q25) to RM51.42bil, compared with RM56.47bil in the previous corresponding period.
Transaction volume dropped 6.2% year-on-year to 97,772 in 1Q25, compared with 104,194 in 1Q24.
In spite of the decline, Siders said that demand for property so far this year has been steady.
'Household spending has been steady. Inflation levels have been manageable and the cut in interest rates will help, especially when it comes to the repayment of housing loans.'
The Statistics Department announced earlier this month that Malaysia recorded a slightly slower rate of inflation in June compared with the previous month.
This was below economists' expectations that there would be no change to the rate of consumer price increases.
In June, the consumer price index rose 1.1% compared with 1.2% in May - representing the index's slowest rate of increase in 52 months.
Malaysia's core inflation during the month was 1.8%, the same rate as in May.
Meanwhile, Bank Negara cut the overnight policy rate by 25 basis points to 2.75% at its Monetary Policy Committee meeting this month.
MBSB Research in a recent report noted that approved loans for the purchase of property increased by 5% month-on-month in May after an increase of 6.8% month-on-month in April.
'The higher loan numbers were mainly driven by a higher approval ratio of 46.4% in May against 44.3% in April.
'On a yearly basis, approved loans climbed by a marginal 0.8% year-on-year in May, despite lower loan applications due to higher loan approval ratio of 46.4% from 44.6% in May 2024.'
Cumulatively, the research house said total approved loans in the five months of this year was unchanged at RM110.9bil.
'We expect that total approved loans to be marginally stronger in the coming months as loan applications are expected to remain resilient,' the research house said.
Siders said that sentiment is 'still holding'.
'The market is still holding and developers are still selling, especially affordable homes below the RM500,000-mark.'
Siders noted that the built-up areas of incoming properties have been getting smaller.
'Surprisingly, the market has been accepting of the smaller built-up areas for homes. As long as banks provide financing, the market will hold,' he said.
Siva also acknowledged that the market, so far, has been steady.
'We are still riding on the momentum of the last two years, post-Covid, where growth has been good.
'However, with the ongoing tariff wars and geopolitical uncertainty, we may feel the impact, if any, in the third and fourth quarters. So far, we have not felt the repercussions yet.'
Siva said market sentiment is still good.
'The residential sector is still active and people are buying. Borrowing isn't too difficult.
'Unless there is some unforeseen circumstance like a random, unexpected, high-impact event, or events, that could severely affect the economy, the market should be fine.'
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