It attributed the upward trend in prices to the increase in the overnight policy rate to 2.75%. On the other hand, it said, affordability challenges or a lack of confidence in the market had led to a drop in demand.
PropertyGuru said this led to an increase of 1.5% quarter-on-quarter (q-o-q) in sales price index, while the demand dropped 14.8% q-o-q.
In a statement issued to the media today, its country manager Sheldon Fernandez said that while the market remained active in 2022, Malaysians were becoming more careful with big purchases.
The asking price — as listed on the PropertyGuru website — rose 5% over three consecutive quarters in 2022.
“As the rate of inflation rises and borrowing costs become higher, potential buyers have had to reconsider new purchases,” he said.
This in turn forced sellers to raise prices to cover higher cost of their property investments, he added.
Bucking the trend are three areas within Kuala Lumpur, namely Taman Desa Cheras, Bandar Tasik Selatan and Taman Bukit Anggerik, where demand for property continued to rise.
The increase in property prices has also worked in favour of the rental market, Fernandez said.
The demand for rented property swelled 32.9% in 2022, making it a windfall year for landlords looking for alternative sources of income to offset inflation.
However, the demand eventually eased — by 4% in 4Q 2022 — likely as a result of the high rental rates, which rose 2.8% during the quarter.
Nonetheless, PropertyGuru said, the rental market is likely to remain active given that the recent waiver of industry quotas to speed up the hiring of foreign workers will bring fresh demand for rented property, especially those close to industrial areas.
There was a drop in demand in both the sale and rental markets at the end of 2022 but Fernandez said it was likely because Malaysians were putting their home ownership plans on hold going into the year-end holidays and festivities.
He advised property players to take note of the affordability issue given that many Malaysians are still looking forward to more assistance from the government under Budget 2023 before making big purchases.