Positive consumer sentiment this year in light of improving economy

PROPERTYGURU: POSITIVE CONSUMER SENTIMENT IN 2018 IN LIGHT OF IMPROVING ECONOMY 

KUALA LUMPUR, 29^th JANUARY 2018 – Measuring the pulse of the property market, PropertyGuru Malaysia’s latest consumer sentiment survey indicates that despite the headwinds battering the property market, consumer satisfaction has improved with a greater number of buyers looking to transact in the next six months.

While the increase in consumer satisfaction is marginal, it is likely that the improving sentiment may persist going into 2018, as consumers react positively to issues of oversupply in the market, improved assistance from the government for affordable home ownership and macro-economic factors. These macro-economic factors include the strengthening of the ringgit, rising crude oil prices and better than expected GDP growth among others.

“Our analysis in 2017 shows that the market has been moderating with prices generally declining. However, with the better than expected economic performance, consumers are gaining confidence again. Coupled with the oversupply issue which may see prices drop further in 2018 for certain property types, consumers now are expressing improved satisfaction. This sentiment may hold throughout 2018 barring any unforeseen circumstances,” shared PropertyGuru Malaysia Country Manager, Sheldon Fernandez.

“While some buyers may adopt a wait and see approach prior to the upcoming general elections, it is likely that 2018 will see more transactions as buyers try to capitalise on the oversupply of certain property types, particularly high-rise strata units. This is a welcomed development but it is really too early to say that the market has recovered,” added Fernandez.

¾ Malaysian Believe Market is Oversupplied, 57 Percent to Transact in the Next Six Months

The PropertyGuru Consumer Sentiment Survey showed that three out of four Malaysians believe the market is oversupplied – a significant jump from the previous six month’s 64 percent. In addition, desire to purchase in the next six months has jumped 5 percentage points in the last six months to 57 percent with consumers looking at both primary and secondary properties to optimise their choices.

About 1/3 are looking for properties priced between RM300,000-RM500,000. Those looking for properties priced RM300,000 and below have increased by 5 percent to reach 31 percent from the previous six-month’s 26 percent.

“A significant number of buyers have modified their budgets and with that, are more prepared to transact. With smaller budgets, they perhaps are better able to buy a property, which may have contributed to improving sentiment,” added Fernandez.

Consumers’ criteria when purchasing a home remain unchanged with location, security and safety and unit size being the top three factors for consideration when making a purchase decision.

Long-Term Consumer Sentiment – Capital Appreciation of 10 Percent and More Expected

While consumers are looking to capitalise on declining prices, most believe that the long-term wealth preservation capability of real estate as an asset class remains intact. PropertyGuru’s data showed that a majority of Malaysians believe that property prices will appreciate over a 5-year period across all property types.

In PropertyGuru’s Consumer Sentiment Survey, 44 percent of respondents polled were 1^st time home buyers or those intending to purchase a home in the near future.  Investors and upgraders formed the next highest consumer segments at 30 percent and 20 percent respectively.