Bank Negara: Risks contained for non-residential property sector despite challenges
Risks in the non-residential property (NRP) sector remained contained in the second half of 2024 (2H 2024) despite continued challenges
KUALA LUMPUR: There is a general consensus that rents and home prices will rise in 2024, suggesting the possibility of growing rental yields and capital appreciation.
Just 5.0 per cent of respondents to IQI's nationwide research panel of 203 real estate agents and negotiators nationwide (except Perlis) anticipate a decline in prices, and only 3.0 per cent anticipate a decrease in rent.
As a result, developers might start new projects, and investors and tenants might come back to the market, according to Kashif Ansari, co-founder and group chief executive officer (CEO) of IQI and Juwai IQI.
So, is the upcoming year a good time for investors, homebuyers, real estate agents, and developers?
Kashif says that it appears that the buy-to-rent ratio is increasing.
He disclosed that there is a great deal of confidence in the real estate market, with 91.1 per cent saying they would advise a friend to buy now and only 8.9 per cent saying they would prefer to rent.
According to Kashif, there is a positive outlook for the market among the hundreds of brokers and negotiators in every location.
"Agents may recommend buying because they expect significant increases in both sales prices and rents in 2024. This optimism might be based on expected economic trends, investment inflows, infrastructure improvements, and demand and supply dynamics.
"The forecast is for a 9.95 per cent increase in residential prices and a 9.57 per cent increase in rents during the next 12 months. Specifically in Kuala Lumpur and Selangor, the industry expects prices to climb by 9.7 per cent and rents by 9.9 per cent," he said.
The IQI Property Survey and Index—Malaysia Q4 2023 predicts that changes in housing affordability, urbanisation, economic growth, and Malaysia's demographic trends will all contribute to increased demand in 2024.
According to Kashif, the majority of the increase in transaction volume will be for reasonably priced and moderately priced real estate.
Fifty-one per cent of purchases have a value between RM100,000 and RM500,000, according to data from the National Property Information Centre (NAPIC).
"When it comes to the economic outlook, the research reveals a mixed but generally positive outlook. Agents in our research panel are keeping a wary eye on broader economic factors and global disruptions that have the potential to undermine Malaysia's trade growth," he said.
Just 33.5 per cent of respondents anticipate a weakening of the economy over the next 12 months, whereas over half of respondents—56 per cent—expect it to grow.
The most prevalent prediction is that it will be "somewhat stronger" (35 per cent) and then "somewhat weaker" (25 per cent) in terms of the economy.
The World Bank's latest projections, released in October, support a positive outlook.
The Bank projects that gross domestic product growth will be 4.3 per cent in 2024, up from 3.9 per cent in 2023.
