iProperty.com Malaysia Consumer Trends Survey for the 2nd Half 2010
Mar 17, 2011
iProperty.com Malaysia (www.iproperty.com.my), Malaysia’s No.1 property website has released the results of the iProperty.com Consumer Trends Survey for the 2nd half of 2010.
The survey, conducted from October to December 2010, tracked consumers’ property purchase preferences over the 1st and 2nd half of 2010. A total of 1,069 people responded to the 20-question survey.
Key Points for 2H 2010:
1. Bank Negara’s imposition of the 70% cap on LVR (Loan to Value Ratio) for third home mortgages onwards will likely affect about 40% of potential property buyers.
2. Strong investors’ appetite for landed properties saw a 9% jump in interest in such properties resulting in the run-up in prices of such properties.
3. Property prices within the range of RM200K - RM300K remained the most popular which ties in with the average annual household incomes of RM45K – RM80K earned by 27.7% of the respondents.
Among the respondents, males outnumber females 7:3 while 85% of respondents were aged between 25 – 44 years. Almost 60% have a bachelor degree.
About 40% work in executive/managerial positions, while 22% describe themselves as professionals. Ten percent are self-employed while 4.4% come from CEO or senior management ranks.
Average annual household incomes range between RM45,000 and RM300,000, peaking in the RM100,000 – RM150,000 range.
What’s interesting is that one third of the respondents already own a property, while another one third do not yet own any property. About 20% own two properties while fewer than 10% own 3 properties. Another 10% own 4 or more properties.
Out of these, 85% plan to purchase property within the next 12 months. This showed that Bank Negara’s imposition of the 70% cap on LVR (Loan to Value Ratio) for third home mortgages onwards will likely affect about 40% of potential property buyers.
Home buyers accounted for nearly half (49%) of the survey respondents in the second half of year 2010, followed by investors, who accounted for about one third (27%) of the total. This does not differ much from the 1H results. However, the percentage of investors declined from 31% to 27%. One of the reasons could be the 70% cap on LVR. Other respondents are property agents (8%), casual browsers (10%), tenants (5%), etc.
Market Motivation: Equal interest in the nest and the golden goose The survey results indicate that 51% of the respondents checked out properties for own stay, a very slight decrease from 52% in the first-half of 2010. Meanwhile, investors accounted for 49% of the respondent pool with goals of reaping rental income (32%) and capital appreciation (17%).
Property Preference: Condos and landed properties still rule
The online search was still most popular with residential prospects namely condominiums (38%) and landed properties (56%), both new and resale. In the second half of 2010, the two categories accounted for over three quarters of the search activities by the portal users. Resale properties were preferred over new properties (49% resale to 45% new).
It is interesting to note that there was a marked increase of 9% in landed properties from the first-half to the second-half, jumping from 47% to 56%. This explains the huge price appreciations of subsale landed properties in 2H 2010 which is fuelled by strong investors’ appetite for such properties.
Meanwhile, commercial properties such as office, retail space, plantation land, etc. combined accounted for only 6% of the total interest in the second half of the year. Most notable is the acute decline in interest in retail spaces from 6% to just 2%. This is likely due to the huge supply in the market with several new shopping malls launched last year.
Purchase Budget: RM200K – RM300K Properties are hot
Over 90% of the surveyed respondents opted for properties below RM1 million in various categories namely, Below RM 200K (14%), RM 200 - 300K (27%), RM 300K - 400K (19%), RM 400 -500K (17%), and RM 500K - 1 mil (17%).
Most participants expressed interest in properties within the price range of RM200K - RM300K. This ties in with the average annual household incomes of RM45K – RM80K earned by 27.7% of the respondents.
However, properties in the range of RM500K - RM1 mil showed a drastic decline of 5%. Again, this is possibly caused by the 70% LVR cap as investors avoid properties priced in this range. The limit does not seem to affect properties priced from RM1 mil onwards as the percentage of potential buyers for these properties remained constant throughout the 1st and 2nd half. This is not surprising considering that people looking at these properties are high net worth individuals who are not affected by the loan limit.
Comparison of Top Five Search Areas in 1H and 2H of Year 2010 (Kuala Lumpur, Selangor, Penang, and Johor)
Kuala Lumpur
Among the hot property areas, Cheras, Ampang and Mont Kiara were on the top five list throughout the year of 2010. These are townships marked with rapid development of housing projects that emphasize a balanced lifestyle. In the first half of 2010, Puchong and Old Klang Road made the list. Coincidentally, both townships are situated southwest of the city centre with Puchong being slightly farther. They attract out of town residents due to their lower property prices and proximity to KL city centre.
Going into the second half of the year, Bangsar and Kepong climbed up to take the spots. Bangsar is an affluent neighbourhood just minutes away from Kuala Lumpur and its popularity among property buyers is understandable. Meanwhile, Kepong located in the north of KL is seeing an increasing number of residential projects launched there. It is near a green lung and is highly accessible via various highways.
Selangor
The top five search areas for the state were consistent throughout year 2010. The townships that attracted most interests were Petaling Jaya, Subang Jaya, Shah Alam, Puchong and Kota Damansara. Interestingly, the first three, namely Petaling Jaya, Subang Jaya and Shah Alam are lined up along the Federal Highway running east-west. It is an indication that buyers who are considering one of them could be interested to look into the other two. Location wise, these townships are within convenient driving distance to the city centre, roughly within the range of 15 to 30 kilometers. The social and economic interests of these aspiring buyers are clearly concentrated in the Klang Valley.
Penang
The three ultimate hot spots in year 2010 for the Penang state are Butterworth, Tanjung Bungah and Bayan Lepas. These townships made the top five list throughout the year. Butterworth is located in Seberang Prai in Penang Mainland. Meanwhile, Tanjung Bungah and Bayan Lepas are bustling townships on the Penang Island.
Other island townships that made the top search list were Batu Feringgi, Gelugor, and unsurprisingly Georgetown, which saw renewed interest due to its heritage status and urban renewal projects. Notably, Bukit Mertajam joined the top list in the second half of the year. It is the capital of Seberang Prai and is located not far from Kulim, Kedah state. This is likely due to the spillover of interest from Penang island.
Johor
Generally speaking, the interest areas for Johor buyers are fairly consistent throughout year 2010, and are all located on the west coast or around Johor Bahru, the state capital. The top four on the top five list for the year are Johor Bahru, Skudai, Gelang Patah and Batu Pahat. Meanwhile, Muar and Kulai joined the list respectively in the first and second half of the year due to new projects announced there. Location-wise, Johor Bahru, Skudai, Gelang Patah and Kulai, which are all part of Iskandar region are due for a resurgence due to it many catalytic projects coming onstream from next year.
The results of the iProperty.com Consumer Trends Survey 2nd Half 2010 combine the findings of an online survey conducted by iProperty.com Malaysia with internal search data extracted from the same website.
Commenting on the survey, Timothy Hor, Country Manager of iProperty.com Malaysia said: “The results once again confirmed several known aspects of our property market – that interest in landed properties remains strong, and that properties worth RM200K - RM300K are the most sought after by the majority of property hunters comprising almost one third of the sample. This is not surprising given that the annual income bracket of RM45K – RM80K is the most common among the respondents. ”
On Bank Negara’s imposition of the 70% cap on LVR (Loan to Value Ratio) for third home mortgages onwards, Hor revealed that based on the results, the move will likely affect about 40% of potential property buyers.
