Opportunities and risks in the real estate market in 2022

Following the unprecedented events of the past two years, the country appears to be on the right path to recovery as we enter the endemic phase. However, Uncertainties Linger and Businesses Still Need to Adapt to the New Normal, Says CBRE | Foo Gee Jen, Chairman of WTW.

Foo will speak on “Looking Ahead: What to Expect in the Next 12 Months” at The Edge Malaysia RealTalk Forum 2022 on July 16.

The annual real estate forum (formerly called The edge Investment Forum on Real Estate) returns after two years. This year’s theme is “Investing in times of volatility: how, what, where?” The forum will be held at One World Hotel in Petaling Jaya, Selangor.

“The drop in previous years was rather steep and unexpected, but 2021 brought learning curves to better manage this time of struggle. We started the year with optimism as strategies and news implemented by the government have been put in place for the country,” Foo said.

He notes, however, that the real estate market will continue to face challenges such as geopolitical instability, supply chain disruption and inflation, which increases the cost of living.

Foo: We see light at the end of the tunnel with normalcy slowly approaching, but precautionary measures must still be taken as we manage lessons learned during the pandemic (Photo by CBRE | WTW)

In his presentation, Foo will also discuss some factors that the real estate market can expect over the next 12 months, including increased foreign direct investment, job security and a more active market with the opening of several new properties such as shopping malls and hotels. These developments will boost investor confidence in the property market in Malaysia.

“We see light at the end of the tunnel with normality slowly approaching, but precautionary measures must still be taken as we manage the lessons learned during the pandemic,” he adds.

Another speaker at the real estate forum will be Amy Wong, Knight Frank Malaysia’s Executive Director, Research and Consulting.

It highlights some of the opportunities that can be found now, including historically low interest rates and the development of new MRT lines. On the first, Wong says current financing options are at the lowest interest rates in a decade.

“Bank Negara Malaysia kept the OPR (overnight policy rate) between 3% and 3.25% for almost 10 years, between 2011 and January 2020, before gradually lowering it to an all-time high of 1 .75% in July 2020. The recent increase to 2% is seen as a moderation in the market and should not immediately have a negative impact on the real estate sector.

Wong: A property is a big purchase and you have to consider global issues [when making one] (Photo by Knight Frank Malaysia)

“However, interest rates are subject to economic conditions, so if Bank Negara can hold them for 10 years and bring them down to an all-time high in seven months, the reverse is also very possible,” she adds. .

Wong is a strong advocate for efficient and well-managed public transportation. “So, I would say, follow the (MRT) lines. It’s an investment that can’t go wrong.

In her upcoming presentation titled “Opportunities and Risks,” she will also discuss risks home buyers need to watch out for, including global inflation and household disposable income. “A property is a big purchase and you have to consider global issues [when making one].”

Wong also advises potential buyers to consider rising construction costs driven by higher raw material prices. The latter results from the volatile situation of supply and demand due to the global economic environment, as well as the inevitable increase in credit interest rates. “The developer’s track record is also very important in these uncertain times,” she adds.

Is it the right time to invest in real estate? “If you think house prices are going up, then definitely buy at the bottom of the curve now, right?” Wang said.

Chan: A good time [to invest in property] it’s when needs and abilities match (Photo by MIEA)

“Our research shows that there is a clear shift towards property purchases for owner occupation, rather than speculative investments and rentals. So if you are buying for your own stay, different factors come into play, and some factors no longer apply, such as rental income.

Another speaker at the forum will be the president of the Malaysian Institute of Estate Agents (MIEA), Chan Ai Cheng. His presentation titled “Making Realty Dream a Reality” will discuss some of the key factors first-time home buyers should consider: location, accessibility, property type, size and price.

“These are very important factors that are part of the decision-making process for any real estate buyer,” she says.

Chan says location is important because of the community and amenities it provides, while accessibility must be considered as it relates to ease of travel, whether by personal vehicle or public transport. in common.

“The size and type of property matters depending on the lifestyle choices of the individual or family, while price is always a key factor and a constant mismatch.”

Chan advises first-time buyers to study how the prices of their area of ​​interest or type of property have changed over the years as well as demographic trends. Research data is important, she notes.

“I strongly believe in buying/investing in a property according to your own needs and abilities. Each individual’s situation and needs are different. Thus, the decision cannot be based on a majority, general or global assessment. A good time is when his needs and abilities match,” advises Chan.

Nippon Paint is the main partner of The Edge Malaysia RealTalk 2022. The event is also supported by Matrix Concepts Holdings Bhd, Gamuda Land and Panasonic Malaysia.