When COVID-19 hit in late 2019, little did we know that the world would literally be transformed before our eyes. With borders shut and social distancing in effect, lockdowns were effectively a regular fixture for citizens of the world.
Now after two years of being stuck at home and with remote working and studying a norm there is a sense of a return to normalcy. That said, the pandemic has effectively changed our way of life and also some of our preferences. One segment, which has witnessed a shift is none other than the property market.
With the rise of teleworking and also virtual studying, buyers are a bit more discerning with the types of homes and communities they prefer to live in. The recent Malaysian property transaction data (Q1 2021), showed that homebuyers preferred more spacious units. Data also showed that there was also a preference for landed units compared to high-rises.
In Q1 2021, terrace houses made up more than 50% of transactions followed by condos and apartments at 18%. This transacted data also corresponds to the number of searches on Mudah Property. The data here reveals that over a quarter of total searches were for landed properties. Apartments and condos registered a total of 13.1%.
Shifting Preferences & Needs
The changing preferences is understandable. With the daily work commute practically off the table for nearly two years, home buyers now realise that lower density areas like in the outskirts of town or townships offer increased benefits.
With land scarcity not an issue, these areas offer more spacious layouts, allowing owners an opportunity to set up a home office or a recreational room like a home gym. Areas that proved popular amongst buyers (in terms of transactions) included self-contained townships such as Bukit Sentosa, Bandar Bukit Beruntung in Rawang and Bandar Putra in Kulai.
With land banking not an issue, these areas provided neighbourhoods that were more spread out and homes with additional land space like gardens. They also provide more favourable prices per square foot compared to those in the city. These townships also boast their own parks, walkways and conveniences allowing residents to get their essential items and go for their daily walks or strolls whenever they needed to break a sweat or get some much needed breathing space.
A Boost For The Subsale Market
The evolving preferences has had a ripple effect on the secondary property market. According to recent market reports, the sub-sale market in the Klang Valley alone recorded a three-year high. A large part of this is attributed towards buyers looking for preferred units such as landed properties or residences in specific or more established neighbourhoods.
Sub-sale units reportedly outperformed new developments in Q1 2021. This is owed towards a softening property market, which saw many key developments being offered at more appealing prices, many of which were below market value.
Those who have bought properties during the pandemic are also viewed as long term investors. That’s because despite the appealing factor to owning bigger units in townships in newly developed suburban areas, these units normally have a longer time to generate capital appreciation as well as rental yields.
The question that naturally comes next is, as the vaccination rates continue, will all of us revert from living in the new normal? According to a recent Bloomberg report, workplace activities are still below pre-pandemic levels across the globe. Some offices have also delayed recalling workers back into the office due to the spread of new variants of the virus.
On local shores a recent survey by a leading online employment marketplace saw that most multinational businesses, IT industry professionals and those employed and living in the city are more likely to continue working from home.
Although the work-from-home setup may be a default setting at the moment, when the world actually returns back to normal, we will see the real estate market preferences change once again. Those who want to capitalise on this will have to adapt quickly to another paradigm shift and lookout for more opportunities in the real estate market.
The post-pandemic era, coupled with the return to normalcy and the eventual revival of the economy will likely create a more conducive and vibrant real estate market, which we saw before the pandemic hit. Until that day comes it pays to have a keen eye out to see what’s available presently in the property market.