BNM: Prices of homes not expected to fall significantly as first-time homebuyers’ demand still strong

The values of properties in Malaysia will likely not drop significantly, due to continued demand from first-time buyers for affordable housing and as developer roll out more affordably-priced projects, Bank Negara Malaysia (BNM) said.

Financial Stability Review for the first half of 2021, BNM examined recent trend in the residential property market, observing that the number of transactions of houses bought had decreased this year.

Based on the data of National Property Information Centre’s (Napic), 75,300 houses were sold with an average transaction value of RM 340,100 in the first half of 2020 which then increased to 116,000 housing transactions with an average transaction value of RM 347,000 in the second half of 2020.

The dropped to 92,000 housing in the first half of 2021 from January to June with a higher average transaction value of RM 375,000.

In explaining the lesser transaction, BNM highlighted that market activity from April to June was weighed down by tighter movement restrictions and operational frictions after Covid-19 cases surged.

Even as the housing market activity slowed down, the average transaction values had grown at a stronger pace, as transactions for housing priced below RM 500,000 accounted for more than 80 percent of housing transactions.

With developers expected to offer new housing with more affordable prices and continued demand from those purchasing their first home, BNM said there would be reduced risks of significant drop in housing prices.

Source: Malay Mail