Property prices expected to decline by as much as 20% following Covid-19 — buyers market ahead, says MIEA
Property prices are expected to decline by as much as 20% in the next few months with more motivated sellers, as the impact of Covid-19 continues to unfold.
During the online Asean Real Estate Forum, Malaysian Institute of Estate Agents (MIEA) president Lim Boon Ping said that the Malaysian real estate market will shift to a buyer’s market, from a seller’s market previously, as a result of Covid-19.
As such, property prices at best could decline by 10%, and at most could decline by 20%.
That said, he noted that despite the implementation of the Movement Control Order (MCO) — which has resulted in no property viewings, moving in and out of properties, and sale and purchase (S&P) agreements being signed — there have been some property deals that have been closed without viewings.
“There are cases where negotiators [have been] closing deals where the buyers have not viewed the property,” he said.
He added that real estate agents in Malaysia should learn to use technology to enhance the services they provide following the MCO and Covid-19.
Regarding a report by the International Monetary Fund (IMF) stating that Malaysia would have the fastest-growing gross domestic product (GDP) among Asean-5 countries in 2021, Lim said that there are many voices who have different views on the matter.
“The message sent out is that Asean countries will suffer [this year]. But there will be a positive rebound in economic activities,” he said.
Meanwhile, Indonesian Association of Real Estate Agents (IAREA) vice-president Jaya Cahyadi said that there will be a shift in the concentration of wealth following Covid-19. As such, real estate agents should broaden their network and find those.
He cited that those involved in the production of medical supplies such as hand sanitisers and masks would likely have more capital and as such real estate agents should look at the owners of such businesses when broadening their client network.
“After Covid-19, you want to go after the right people in the right industries. Now is the time to find the right people,” said Jaya.
When asked if there would be an influx of Singaporean buyers into the Malaysia market, president of Singapore’s Institute of Estate Agents (IEA) Herman Yeo said Singaporean buyers would still buy if the property is within the high-end segment and is attractive enough.
Meanwhile, Jaya said that Indonesian investors with the means to do so would likely invest within Indonesia, as opposed to Malaysia and Singapore, due to the weakening rupiah and the great amount of opportunities in the country.