PETALING JAYA: Apart from the residential segment, which is likely to face some headwinds, the Malaysian property market is expected to see continued growth this year.
Property consultant Knight Frank Malaysia (KFM) expects the residential, office, retail, industrial and hospitality segments to continue their growth trajectory.
However, expected increases in interest rates could dampen the recovery in the residential segment, it said in its outlook for 2023 report released today.
Bank Negara Malaysia (BNM) last raised the overnight policy rate (OPR) by 25 basis points (bps) to 2.75% in November, but the consensus among analysts is that further increases are on the cards.
Most forecast an increase of another 50bps – most likely over two instalments of 25bps each – this year to bring the OPR back to the pre-Covid-19 level of 3.25%.
KFM research and consultancy senior executive director Judy Ong said the revival of economic activities and the reopening of international borders have boosted interest in high-end condominiums in the secondary market.
She noted that the transacted prices of selected existing high-end condominiums and service apartments have risen from the RM780 to RM870 psf range in the first half of 2022 (H1 2022) to the RM800 to RM900 psf range in H2 2022.
In the office segment, Ong said, the market in Kuala Lumpur remained competitive given the increased supply of space as a result of the completion of new projects within the city as well as on the fringes.
“In Selangor, the market for office space remains resilient, with leasing activities on the rise, especially for Grade A buildings in established locations,” she added.
Ong also expects the overall rental market to remain positive.
Preliminary data in KFM’s real estate highlights for H2 2022 report shows that occupancy rates stood at 75% with rental rates at RM7 psf.
The retail segment also experienced a strong rebound given the robust growth in retail sales. The full-year growth rate has been revised to 41.6% in line with the impressive 96% expansion seen in Q3 2022.
Research and consultancy executive director Amy Wong said the continuous shift in shopping patterns as well as the evolving e-commerce landscape have forced retailers and mall operators to leverage on the strength of flagship and speciality stores to boost sales and engagement.
The local retail sector is expected to be supported by steady domestic demand fuelled by the new government’s pledge to tackle the high cost of living.
The industrial segment is also on an upward growth trajectory, driven by strong demand from logistics businesses and investors.
The Klang Valley remains an ideal destination in the country for nearshoring of firms with focus on Southeast Asia as it offers the right balance between cost, efficiency and quality.
The industrial segment saw a rebound in sale in 2022 over 2021. By the end of Q3 2022, the segment already saw 2,130 industrial properties change hands, up from 2,049 for the full year in 2021.
The value of the properties transacted in 2022 amounted to RM8.024 billion, compared with RM9.15 billion in 2021.
Wong said the improvement is expected to continue into 2023, supported by enablers such as logistics infrastructure, increasing freight volumes, structural growth in e-commerce and supportive government policies.
KFM group managing director Keith Ooi said the overall performance of the property sector was in tandem with the robust economic recovery. BNM expects the 2022 full-year growth to exceed its forecast of 7%.
The real estate highlights report features insights into the performance of the property markets across the Klang Valley, Penang, Johor Bahru and Kota Kinabalu.
Source: https://www.freemalaysiatoday.com/category/business/2023/01/11/recovery-in-property-market-expected-to-extend-into-2023/