New data from Malaysia reveals that the real estate industry has a bullish outlook for 2020 and 2021.

Juwai IQI has this new, deeper insight thanks to the first-ever large-scale effort to track the Malaysian real estate market by asking industry experts.

It's called the Juwai IQI Residential Property Survey and Index. 

More than 380 agents were surveyed for the Juwai IQI Index in what was the first comprehensive market study of its kind in Malaysia and conducted on a larger than a similar study by NAB in Australia. 

What did the surveyed agents say?

Well, more than 60 per cent of respondents believe the number of sales will increase across all buyer types in the coming year, with residential prices are to grow by 5 per cent in the next 12 months and by 15 per cent in the next two years.

What about rents?

Respondents believe residential rents may be on a similar trajectory, predicting they will rise by 5 per cent this year and by more than 10 per cent next year. 

The most interesting part of the data tracks the share of sales that go to each type of buyer. 

Source: Juwai IQI Residential Property Survey and Index

First-time local buyers account for the largest share of new-build purchases at 30.1 per cent of transactions, but are only third in the subsale/secondary market at 24.9 per cent?

Local upgrade buyers flip these ratios - Upgraders are the third-largest buyer group in the new-build market and account for 21.1 per cent of purchases, but they account for the most sub sale/secondary purchases at 29 per cent of the total. 

These stats suggest that first-time buyers rely on new development property as a more affordable or appealing way to acquire their first home, while also showing that upgraders are more likely to purchase a sub sale property than in a new development.

Foreign buyers account for the smallest share of all transactions, making up only 19.3 per cent of new-build sales and 19.7 per cent of sub sale/secondary purchases.

The survey respondents reported the number of sales will increase in 2020, with nearly two-thirds of respondents believing that first-time local buyers, local upgrade buyers, local investors, and foreign buyers will all buy more property in 2020 than they did in 2019.

The forecasts vary by state. In Ipoh, 100 per cent of respondents believe that first-time buyers will close more transactions.

It's a different story in Sabah, where only 61.3 per cent believe there will be an increase.

Source: Juwai IQI Residential Property Survey and Index

How does the data from the Juwai IQI Index compare to economic indicators?

The Index shows that the property industry expects robust growth in 2020 and 2021.

The macroeconomic forecast is also good, but not quite as strong.

Juwai IQI expects the economy to grow in 2020 by 4.3 - 4.8 per cent, while exports and the trade surplus will also climb.

Malaysia is a trade war winner - It is attracting companies and operations that otherwise might have gone to China.

What will happen to the market? That's the most common question I get whenever I meet someone, and they find out I'm in real estate. Now, with the new Juwai IQI Index, I can finally give them answers based on large-scale market insight.

Click here to read more about Mr Ansari.

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