PropertyGuru Malaysia released its biannual Consumer Sentiment Study (CSS) for H2 2023, which revealed that more than half or 56% of the Malaysian respondents surveyed are keen to enter the property market sometime in the next 1  year. Despite rising property prices and continuous economic challenges, the purchasing intent of potential homebuyers remained constant when compared to the previous CSS installment (55%).

Sheldon Fernandez, Country Manager, Malaysia (PropertyGuru.com.my and iProperty.com.my), shared, “In the first half of 2023, the local property market was riddled with various economic external pressures. Bank Negara Malaysia’s (BNM) data from June 2023 recorded a decrease in loan applications, and PropertyGuru’s MPMR Q3 2023 also saw a decrease in property enquiries in the second quarter of the year. Despite the gloomy outlook, it is encouraging to see that the purchasing intent from consumers remains unchanged. While we do expect slower transaction activity in the housing market for the rest of the year, we hope that the gradually stabilising economy will revive Malaysians appetite for properties in 2024.

Although the intention to buy is strong among Malaysians, the CSS survey findings also indicate that consumers remain wary of the various barriers towards homeownership, with the most prominent one being housing unaffordability. From the study, 87% of property respondents continue to rank property prices as the biggest barrier to their buying ambitions. Other purchasing deterrents include rising interest rates, concerns about economic recession, inability to get home loans from banks, down payment hiccups and political instability.

“Rising property prices coupled with stagnant wages and increasing living costs have made homeownership aspirations harder to attain for many Malaysians. While steady price appreciation reflects a healthy real estate market, the growing wage-house price gap will price out large population segments. Similar to previous waves, respondents in the survey have indicated the need for government assistance, key considerations can include moderating price fluctuations, which could help maintain a balanced property market where prices are aligned with income growth and cost of living. We are hoping for some good news from the progressive wage policy that will be tabled in Budget 2024, as it might be the support Malaysians need to bring them closer towards their homeownership dream,” shared Sheldon.

In response to the OPR hikes and resulting higher borrowing costs. 35% of respondents expressed that they are looking at cheaper properties.  This underscores a willingness among potential homebuyers to recalibrate their expectations and consider options that align with their financial capacity.​ With consumer budgets shrinking or maintaining against the backdrop of rising costs, it is more important than ever for consumers to identify their priorities when it comes to purchasing a home. 

Case in point, the study shows that respondents are agreeable to compromise on certain amenities in exchange for a more affordable home to fulfill their homeownership aspirations. Respondents, mainly older individuals and renters, are happy to forgo certain amenities such as gyms (49%), playgrounds (46%), jogging tracks/recreational spaces (45%) and balconies (43%) if it leads to a lower price tag. On the other hand, parking spaces, functional kitchens, and second bathrooms are more preferred by respondents. This shift highlights a changing consumer preference where practicality and cost savings are prioritised when selecting a home. 

In addition to their preference for practical amenities, more Malaysians are gaining awareness on sustainability and climate change, as the study also highlighted that sustainable living is gaining popularity among potential home buyers. 1 in 4 (26%) of the respondents are willing to pay more for a green home, and more than half of respondents (58%), specifically adults aged between 22 and 29 years, also believe that homes with green features can help save on utility and maintenance fees in the long run. This indicates a heightened interest in a more sustainable future and eagerness to channel personal values into home purchasing decisions. ​ 

Keeping in mind that the upcoming generation of homebuyers find green features to be a paramount consideration, Property developers aiming to remain competitive should take these preferences into account for future launches. Also, seeing that the majority of respondents (62%) are still open to the idea of green features in homes, but unsure on its benefits -developers could take this opportunity to showcase how opting for a green home could bring more value to homeowners' lives and the environment in the long run.

This year, the government introduced a range of housing assistance programs as part of the MADANI Economy initiative, a development that has been welcomed by the industry and Malaysian consumers. This isa commendable move as, according to the CSS H2 2023 report, 50% of those surveyed, particularly the younger and lower-income demographics, rely greatly on government support to purchase a home. Moreover, 46% of the respondents have conveyed ongoing challenges in obtaining financing for these affordable housing schemes. This struggle essentially undermines the main objective of the various affordable housing initiatives.

Evidently from this study, we can see that housing remains a dream for many Malaysians. For these respondents, the hurdles to homeownership extend beyond property prices. It encompasses the broader economic landscape where consumers must consider daily necessities, education expenses, healthcare costs, and other essential services in an increasingly constrained budget.

“To help consumers overcome the current homeownership barriers, targeted and agile government assistance is crucial to accurately tackle these challenges in the long term. With the OPR rates paused at 3% and inflation easing to 2%, this is a timely opportunity for the government to conduct a comprehensive review of current and proposed housing schemes and initiatives. This will help motivate those with purchasing intent to finally take their first step towards homeownership. We’re looking forward to seeing what the Budget 2024 announcements have in store for these aspiring homebuyers.” Sheldon concluded.