KUALA LUMPUR: Malaysia’s property market is still facing the effects of the Covid-19 pandemic, and this has shown in the third quarter (Q3) of 2020, PropertyGuru said.

According to its Malaysia’s Property Market Index (MPMI) report, asking prices across all four key markets of Kuala Lumpur, Selangor, Penang and Johor has been on a downward trend.

PropertyGuru said overall property asking prices in Malaysia had dropped by 1.34 per cent in Q3, in contrast to the 0.38 per cent increase in Q2 and 0.63 per cent increase in Q1.

“For the first time this year, all key markets saw a fall in prices, indicating that this could be more than a quick dip,” it said in a statement today.

PropertyGuru said with the latest implementation of the conditional Movement Control Order (MCO) after cases increased in a majority of states, current and future commercial activity would be affected.

Johor registered the sharpest decline in Q3, with asking prices having fallen 2.97 per cent.

Kuala Lumpur and Selangor projected weak figures with 1.35 per cent and 1.04 per cent contraction respectively.

Penang saw a slight contraction of 0.64 per cent.

PropertyGuru Malaysia country manager Sheldon Fernandez said with 6,166 unsold completed units in the market, Johor had the largest number of overhang properties in the country.

“The state also registered the sharpest drop in asking prices. Nevertheless, the downward trending price might be favourable for Johor as it may appeal better to the domestic market, which has seen an increase in its online activity on the region’s properties.

“As for Kuala Lumpur, it is going through a challenging period with weakened interest from foreign investors leaving an unsold upmarket stock that is mismatched with local appetites and affordability range,” he said.

Based on the National Property Information Centre’s (NAPIC) first half of 2020 report, Malaysia’s residential overhang rose 3.3 per cent to 31,661 unsold completed units worth RM20.03 billion, compared to the 30,664 units valued at RM18.82 billion over the same period last year.

Fernandez said with a climate of lower property prices, there could be renewed interest and activity among younger buyers who had been actively saving for a property purchase, but had so far been priced out of the market,.

“Certain hotspots in key interest areas have shown a spike in website traffic which leads us to leverage on the fact that 75 per cent of Malaysians rely on property portals as a preferred starting point for their homeownership journey.

“This trend reflects a broader shift to digital tools in the wake of the Covid-19 pandemic with PropertyGuru launching the region’s first Asia Virtual Property Expo, covering ten countries and featuring up to 300 projects – all in one central location,” he added.