KUALA LUMPUR: A number of factors will have a direct and favourable impact on the real estate market in the second half of this year.

The country's overhang numbers, which have decreased since the beginning of this year, show that the housing market is strengthening.

In Johor, the overhang was 14 per cent lower this year as compared to 2021 levels.

In Selangor, the overhang was reduced by 39 per cent, in Penang, by 35 per cent, and in Kuala Lumpur, by 12 per cent.

According to Juwai IQI's group chief executive officer and co-founder, Kashif Ansari, housing starts increased 31 per cent in March this year compared to the previous month. 

"This means banks and developers are putting their money into constructing new homes. That demonstrates faith in the market outlook," he said.

In the first quarter of 2023 (1Q 2023), overall real estate market activity increased dramatically.

Transaction volume and value both increased.

"In March, the aggregate value of real estate transactions surged 40 per cent compared to February, reaching RM18.2 billion. That's the highest it has been in 12 months.

"Transaction volume also climbed to 33,233 in March, the highest since September and the fourth highest level of the last 12 months," Kashif said.

Kashif said the other factor that will contribute to the property market is tourism.

Net exports climbed 54 per cent in Q1 2023, mainly due to higher spending by foreign tourists in Malaysia.

Tourist arrivals have jumped from nearly zero during the pandemic to 1.5 million as of the fourth quarter.

"It's easy to believe they could return to 2019 levels in the next six to 12 months. The growing tourist numbers will drive employment, household income, hotel occupancy, and investment in short-term stays and serviced apartments," he said.

Industrial property is another contributing factor, and there are strong indicators that industry players are confident about the market.

Meanwhile, the Malaysian House Price Index climbed a moderate two per cent in the year through the first quarter, a growth rate not far off pre-pandemic growth.

"We don't yet have first-quarter price data, but in the third quarter of 2022, detached houses remained the most expensive residential property type, with an average price of RM617,432. 

"The average semi-detached house price was RM669,402. The next most expensive category is terraced houses, with an average price of RM418,592. The average price of high-rise properties is RM342,506," he said.