The only way is up

Amid a gloomy economic climate, Malaysia’s property market continues to struggle with transactions down and some realtors being forced to take second jobs. Still, solid fundamentals and value in the market are reasons to be optimistic.

- Stuart Farquhar

It is not quite a riches-to-rags story, and it’s hardly likely to bring a tear to the eye of those who take a dim view of real estate agents, but The Malay Mail Online’s recent report on how real estate agents took up second jobs to pay their bills offered a stark insight into the sharp end of the Malaysian residential property market lately.

Michael, a 38-year-old realtor, had gone from earning “five figures almost each month” in 2012 to having to supplement his income by driving for ride-sharing service Grab in order to keep up the payments on his car and house.

“My property listings in Bangsar, Damansara and some parts of Johor and Ipoh were doing great,” said Michael with some nostalgia. “I used to sell about two to three high-end properties a month but now I hardly sell one and even if I do, the property would be a midrange one.”

The official figures would corroborate Michael’s tale of woe. According to Malaysia’s National Property Information Centre (NAPIC), over the course of 2015, residential property transactions slid 4.6 percent in volume and 10.5 percent in value from 2014 levels. New launches also declined by 19.2 percent from to 70,270 units in the same period.

The most recent quarterly figures from NAPIC, meanwhile, show that the gloomy trajectory has steepened in the first three months of 2016. Transactions were down 16.6 percent from the same period in 2015 and down 15.7 percent from the last quarter of 2015.

With oil prices slumping worldwide and the ringgit now Asia’s worst performing currency, the oil-exporting country’s economy is faltering. The GDP declined from USD10,737 per capita in 2014 to USD10,222 in 2015.