Better days are ahead, as the total property market is predicted to increase this year, with GDP expanding between 4% and 5%, according to CBRE | WTW at the introduction of its Market Outlook 2023 report on January 11.
“Malaysia went through 2022 largely undamaged as its GDP surpassed pre-pandemic levels,” said CBRE | WTW chairman Foo Gee Jen. Despite the anticipated difficulties this year, Malaysia’s economy remains a bright spot in Asia.”
Tan Ka Leong, Group Managing Director, provided an overview of the market. “In 2022, we saw strong property growth in the market. With active property purchases compared to 2021, our country remained the bright star in the area,” he remarked.
According to the study, total loans issued for residential properties increased by 17.6% year on year (y-o-y) to 42% in 3Q2022, and loan amount increased by 105% year on year (y-o-y) to RM49.32 billion.
According to Tan, the improved performance of the industrial property market was attributable to increased investor interest, with several transactions in industrial parks. “Transactions and activities in the retail and hospitality sectors have also improved. “Developers and investors are betting on improved attitudes, while real estate investment trusts (REITs) continue to acquire assets,” Tan explained.
According to the CBRE | WTW Market Outlook 2023 research, the Industrial Production Index (IPI) increased by 12.2% year on year in 3Q2022, led by the mining and manufacturing sectors.
Throughout the presentations, the experts agreed that the real estate market is exhibiting signs of healthy recovery across all categories, and they appeared optimistic about the year ahead.
Cornelius Koh, director of C H Williams Talhar & Wong (Sabah) Sdn Bhd (WTWS), believes that the general market in Sabah improved in the previous fiscal year. “The market is in a period of recovery.”
Large investment initiatives, according to the research, are projected to boost sentiment in FY2023. In the state, total volume and value of transactions climbed 54% to 8,660 and 57% to RM4.568 billion in the period up to 3Q2022. The state is predicted to increase at a rate of 4% and 5% in 2022 and 2023, respectively.
“In the industrial area, Kota Kinabalu is the principal distribution hub in Sabah and there is minimal fresh supply. The office market is modest, with few transactions. Meanwhile, there is a severe shortage of purpose-built offices (PBOs),” he explained.
“Prices in the landed residential sub-segment increased, with rising demand for rental homes. Construction activities have also accelerated.”
According to Koh, the supply of new high-rise residential units is increasing, and sales are gradually increasing. Visitor arrivals increased in the hospitality sector, but they remained below pre-pandemic levels. “At the moment, the hospitality segment is driven by local demand and the reopening of the China market. A growing number of serviced suites and Airbnb rentals were also available. Sabah’s retail sector is generally well managed, with premium shopping complexes projected to retain their performance. Older malls, as well as those with fragmented ownership, must remake themselves.”
“There is also the issue of affordability — with interest rate hikes, inflation, and increasing living costs — as well as the matching of demand and supply,” he added. Market circumstances remain difficult.”
Several projects were launched last year that will be critical to the market, including Esteel Enterprise Sabah Sdn Bhd’s RM19.59 billion, three-phase green steel project at the Sipitang Oil and Gas Industrial Park (SOGIP).
In Sabah, the major industries to watch are tourism-related, in anticipation of the reopening of the Chinese market “and its spillover to diverse sectors. “Demand for storage, warehousing, and services will rise in the industrial sector as well,” said Koh, adding that new landed residential constructions will be scarce.
