Asking prices remain on downtrend, PropertyGuru index shows (Sunbiz，18th February 2020)
Developers and owners across the board are tempering their expectations as the industry adjusts to the closing of the Home Ownership Campaign (HOC) and a lack of strong catalysts this year, according to the PropertyGuru Malaysia Property Market Index (MPMI) Q1 2020 report.
The overall MPMI for the country dropped 1 .04 index points from 89.94 in Q3 2019 to 88.90 in Q4 2019.
These adjustments, in conjunction with Bank Negara Malaysia’s (BNM) recent revision of the Overnight Policy Rate (OPR) and Budget 2020’s emphasis on rent to-own (RTO), serve to make property in Malaysia a buyer’s market in the near term.
OPR cuts such as BNM’s in January often lead to lowered interest rates for loans and short-term hikes in approvals, making it an opportune time for property seekers.
RTO schemes reduce the upfront costs and risks of home ownership by doing away with down payments and allowing participants to opt out of purchases. It should be noted that RTO financing may cost more in the long run than conventional loans.
In totality, these factors serve to shore up home seeker sentiment moving forward, though not to the extent of 2019’s HOC. However, the impact may only be apparent in 2021 and later, due to the delayed purchasing decisions inherent to RTO schemes.
Other notable trends include an increase in serviced apartment units coming into the market.
Confidence in this sub-sector may be due to a rising desire among young professionals and double-income couples with no-kids to live closer to urban centres and places of work to overcome the inconvenience of travel time and cost.
In this scenario, mid-sized serviced apartments in well-connected locations that are either directly linked or close to commercial amenities are benefiting from increased demand.
However, this is highly dependent on area, and should be approached cautiously given the current oversupply of high-rise in some localities.
Meanwhile，following the Covid-19 outbreak， international purchasers’ interest in domestic properties could increase in the coming quarters, particularly in Penang.
The Kuala Lumpur (KL) market contracted 1.35 index points from 96.25 in Q3 2019 to 94.90 in Q4 2019, despite concerted efforts to address oversupply issues including Budget 2020’s revision of foreign ownership thresholds from RM1 million to RM600,000.
Prices are likely to continue their downward trajectory, with supply seeing a 28.8- point increase quarter-on-quarter (q-0-q), and 87.56-point growth y-o-y in Q4 2019. This will likely see developers and property owners adjusting prices to remain competitive, prolonging the downturn.
The incoming supply of residential properties reflects sustained long-term confidence in KL as a hotspot, although this influx into a region that is already coping with sizeable existing stock does not suggest that the price average will be moving upwards in the near term.
In the meantime, programmes such as Residensi Wilayah and Cagamas Bhd’s Skim Rumah Pertamaku will continue to bridge the gap between consumer demand and developer portfolios.
Selangor showcased the most stable asking prices among Malaysia’s major markets, with its MPMI dropping just 0.08 index points from91.51 in Q3 2019 to 91.43 in Q4 2019.
Malaysians most dissatisfied with salary in Asia: Hays (Sunbiz, 19th February 2020)
Malaysian employees are the most dissatisfied in Asia when it comes to their salaries, findings from the Hays Asia Salary Guide show.
46% of employees in Malaysia were dissatisfied or very dissatisfied with their current compensation packages, the highest number to say so in Asia.
Additionally, Malaysia reported the highest number of employees (24%) in Asia who
asked for a pay raise but did not receive one in the last year.
As Malaysia’s brain drain continues to take some of its best talent outside of the country, it has become vital for organisations to offer more incentives to both attract and retain the best talent.
These can be either monetary or non-monetary as with a mismatch in salary expectations imminent, organisations could turn the focus on more holistic benefit packages that can plug the gap by easing other areas of concern for employees.
Another focus would be on upskilling, something that both candidates and organisations can look when it comes to justifying higher increments.
According to the report, the majority of Malaysian respondents (27%) are expecting increases “between 3-6%”, while others (25%) are expecting increases “greater than 10%” – the highest number to say so in Asia after China.
In contrast, the majority of employers in Malaysia (39%) also expect to give out increments“between 3-6%”, but only 4% are looking at increases“above 10%”.
Consumers remain positive amid slight drop in confidence level (The Malaysian
Reserve, 19th February 2020)
Malaysian consumers remained largely optimistic in the fourth quarter of 2019 (4Q19), based on an index score of 107 points on The Conference Board Global Consumer Confidence Index (CCI), produced in collaboration with Nielsen.
The score is slightly down from the 109 points posted in the 3Q19 and a drop from 118 points in the same quarter of the previous year.
The result is the fifth consecutive quarter of decline since the all-time high index score in (3Q18), which was recorded just after the 14th General Election (GE14).
The CCI is driven by three indicators namely consumers’ perception on local job prospects, personal finances and intentions or readiness to spend.
In 4Q19, 61% of Malaysians believed the state of their personal finances in the next 12 months will be excellent or good， compared to 62% in 3Q19 and 70% in 4Q18. Furthermore, around 60% had a positive view on job prospects in the next 12 months, while 46% said“now is the time to buy the things they want and need”.
The survey shows that in 4Q19, 70% of Malaysians believed that the country is currently in a recession, from 73% posted in the previous quarter. Of these, 37% were optimistic about an economic recovery in the next 12 months.
However, 44% has cited the economy as their top concern compared to the previous quarter at 39%. Other top concerns included job security (23%), work-life balance (19%), health (16%), and political stability (14%).
As a result of these economic concerns, Malaysians continued to be cautious with their finances with a majority of consumers (85%) saying that they have adjusted their spending habits to save on household expenses.
When asked what actions they are taking to save on household expenses, 57% said they will be spending less on new clothes, 50% will cut down on out-of-home entertainment, while 47% will switch to cheaper grocery brands.
Given that consumers are slightly apprehensive about spending, brands and retailers should strive to showcase value for money and appeal to Malaysians’ love for promotions.