Upswing points to rising interest in urban high-rises following COVID-19 and MCO, says PropertyGuru.

Asking prices for property are on the increase in major markets in Malaysia, despite the unprecedented impact of the COVID-19 outbreak and resulting Movement Control Order (MCO) on industries across the board.

According to the latest PropertyGuru Malaysia Property Market Index report, the country’s overall Property Market Index showed marginal improvement in the first quarter, increasing 0.63% from 88.90 in Q4 2019 to 89.46 in Q1 2020.

This was accompanied by a substantial drop in incoming supply of 10.47% over the same period, representing the steepest quarterly decline in three years as the MCO impacts construction, listing and viewing activities in Malaysia.

Sentiment up in central region, down in Penang and Johor

"As necessary measures to stem the spread of the pandemic were put into effect towards the end of the first quarter of this year, the property market expectedly saw a sharp drop in activity across the board," says PropertyGuru Malaysia Country Manager Sheldon Fernandez.

"However, the moderation of price growth, as well as transaction volumes and values in recent years, may have had a buffering impact on the market. 

"An upswing in asking prices in major metropolitan areas can also be seen in the first quarter, pointing towards a rise in interest in these areas as Malaysia takes a 'soft-landing' approach post-MCO," he adds.

Selangor showcased the highest rise in asking prices, rising 1.94% from 91.43 in Q4 2019 to 93.20 in Q1 2020, followed by Kuala Lumpur with a 1.81% increase from 94.90 to 96.62 over the same period.

While this timeframe coincides with the onset of the COVID-19 outbreak and MCO in March, the full effects of the pandemic may see steeper asking price drops in subsequent quarters.

However, the upswing points towards strong interest in the central region, which is in line with increased investor activity in high-rise projects closer to metropolitan areas during crisis years. 

This is further reflected in PropertyGuru Malaysia web traffic, with high-rises and condominiums ranging from RM900,000 to RM2,000,000 accounting for the majority of searches on the portal up to March and early April.

Meanwhile, Penang and Johor saw asking price downtrends continuing from recent years, though declines were at 0.13% and 0.59% respectively. 

Penang saw its index fall from 95.39 in Q4 2019 to 95.27 in Q1 2020, while Johor saw the largest decrease across major markets, from 99.59 to 99.00 over the same period.

Healthy price movements in central areas were accompanied by steep drops in incoming supply, declining in Kuala Lumpur and Selangor by 11.53% and 10.19% respectively. 

These patterns were also seen in other major markets to lesser degrees, with supply decreasing by 0.55% in Johor and 0.12% in Penang.