Will Consumers Want Bigger Homes After the Pandemic?
Aishah, a 36-year-old woman, works as a Public Relations executive in a marketing company based in Kuala Lumpur. She was doing alright when she started working from home in March when the pandemic broke out in Malaysia. Aisyah is a single mother and has been diagnosed with diabetes since 3 years ago. She currently resides in a low-cost flat near the LRT Gombak Station with her only son.
Her biggest challenge is to co-manage her work and family needs within the same space. To adjust to the new normal of working from home, Aisyah has converted the living room into a space that’s suitable for her son to conduct e-learning in conducive manner. For her workstation, she has created a dedicated area in her master bedroom. In case her son needs any help from her, they adopted an open-door/closed-door system for better communication. Despite this, working from home in such a tight space hasn’t been easy for Aisyah. There were times when her focus wavered during work and she wished that there could have been a change of scenery — to upgrade her house into a bigger one and in a convenient and peaceful residential area.
Is the Working From Home (WFH) Phenomenon Affecting Home Buying?
Naturally, people are spending a lot of time at home during the pandemic. The rise in work-from-home culture might drive the demand in seeking bigger homes. Many real estate experts have predicted an upcoming change in home preferences —whether sizing up in square footage, outdoor space, better lights, scenery, or amenities. These factors might play a role in affecting prospective home buyer’s decision-making process as more are looking into upgrading their houses for bigger spaces and higher quality of life. Most of the factors come into play when people take working from home, home-schooling, and even home workout into their consideration when choosing their dream house.
According to PPC International’s Managing Director, Datuk Siders Sittampalam, “The Work From Home (WFH) concept has immensely fuelled the demand for properties that don’t just serve as homes but also working spaces. Gone were the days where a single-bedroom apartment was more than enough to cater to one’s needs. Nowadays, there will likely be a higher demand for large properties that can double up as your office for work.
Due to the remote office working trend, the housing demand in Malaysia can be seen to be shifting towards the smaller cities and suburban areas to accommodate the need for larger homes. The General Manager of Customer Data Solutions at REA Group Asia, Pathmanathan said that the most in-demand areas of Selangor in the first half of 2021 are as follows, namely Dengkil, Cyberjaya, Puncak Alam, and Semenyih. The trend was mentioned to be spurred by the snowballed effect of Malaysians looking for a larger living space.
Home Ownership Campaign (HOC) and Low-Interest Rates Boost Home Buying
Why are people still buying homes at the moment? To answer this, there are a few likely reasons to be considered. Firstly, some people are simply in need of a better home and to enhance privacy. The pandemic has encouraged the mindset that we ought to find somewhere comfortable and safe to live in. Additionally, the current mortgage rates are low, therefore the properties are much more affordable to purchase for Malaysians.
With the announcement of Budget 2021, the government continues its commitment to deliver more affordable housing to the general public. Through the reintroduction of the House Ownership Campaign (HOC) 2020, low-interest rates, coupled with a string of homeownership incentives, it is expected that these initiatives will reduce the barriers to residential purchase. It might even, accelerate the buying plans of prospective buyers, who may enjoy more bargains and a wider selection. To show the context, the HOC in 2019 proved successful, having generated total sales of RM23.2bil and successfully surpassed the government’s initial target of RM17bil. Hence, the property market will also likely be seeing increased sales in 1H21 as the new HOC ends on May 31, 2021.
Consumers Remain Optimistic in the Current Environment
Many experts have predicted that the Malaysian property market will start recovering in the first quarter of 2021, this will be more likely when the Covid-19 vaccine becomes readily available. As a result, there will be an increasingly pending number of sales for larger homes, due to the “new normal” of people spending more time at home. In light of the current economic conditions, Malaysian homebuyers are more pragmatic and cautious when it comes to making a high-ticket purchase, and they would instead wait for a better deal in the future.
Based on the Kenanga Research, over 50% of the new launches in the third quarter of 2020 (3Q20) were priced below RM300,000. That being said, with more affordably-priced properties available in the market, the property owners in the secondary market who are desperate to let go of their properties for refinancing purposes will have to compete with the primary property market. This will lead to them reducing the property price to remain competitive in the housing market.
TA Securities reported that the demand for landed property remains resilient. With S P Setia Bhd’s recent launches at Alam Impian and Setia Alam, they have successfully achieved a commendable take-up rate of more than 90%. As such, S P Setia observes a pent-up demand for larger homes as remote working options gain traction after the movement control order (MCO).
Nevertheless, it is still encouraging to see that there are initiatives aimed at incentivizing homeownership among Malaysians. This will be especially helpful for first-time homebuyers in these turbulent times as the country continues to battle the effects of the pandemic.
We hope you found these outlooks provide some insight to help you plan your first home purchase. If you’re still searching for the perfect home financing to help you achieve your dream home, have a look at what is the alternative way available to finance your house or just drop us any questions so we can help
1 April 2021 | By HomeCrowd team