Kuala Lumpur: International real estate technology group Juwai IQI group chief executive officer and co-founder Kashif Ansari has called a projected 25 per cent price increase in homes by the real estate association "overconfident".
The Malaysian Real Estate Association (Pertama) reportedly said that property prices would rise by 25 per cent, notably for homes costing RM500,000 and above this year.
Kashif, in Juwai IQI's report on the second half of 2023 residential market outlook for Malaysia, disagrees with the projection calling it "overconfident", forecasting instead for home price to grow between 1.5 per cent and 4 per cent during the second half of the year compared with a year earlier, he said.
"Households have the financial wherewithal. Inflation is falling, the economy is growing strongly, and employment is high," Kashif said.
He said Bank Negara Malaysia's (BNM) prudent management and the government's proactive initiatives have significantly contributed to Malaysia's stable economic growth and to the property market.
"I don't think most people realise that our growth rate in the first quarter of 2023 (Q1 2023) is well above the average pre-Covid level. Overall, 2023 gross domestic product (GDP) growth will probably come in between four per cent and five per cent, even if the global environment does not improve.
"The strong growth in employment and wages gives households the income they need to spend more. It also allows them to invest in their own homes as investment properties," he said.
Kashif believes that residential property market transactions will improve in the remainder of the year because of several supportive conditions, like falling inflation and strong household finances.
"The year 2022 was a growth year for the real estate market, and we believe 2023 will also (follow). National transaction volume climbed by 30 per cent, and total transaction value rose by 24 per cent compared to the prior year," he said.
According to Kashif, the residential market's strong performance and recent gains have caused the property overhang in the states where it had been the worst to shrink.
He said the market will benefit from the decreasing property overhang.
