KUALA LUMPUR, 6 MAY 2014 – The growing uncertainties of the local property market did not hinder the progress of PropertyGuru Malaysia, as the leading real estate portal displayed promising growth in 2013, closing in on its closest competitor amidst the many challenges ahead for both developers and home buyers.
Factors contributing to the surge include consumer sentiment in regards to fear of an increase in property prices and uncertainties in market value. Current sentiments reflect a healthy demand for information as consumers look to equip themselves with the appropriate knowledge in the property market, consequently helping them in making better informed purchasing decisions.
“We are experiencing a tremendous growth as PropertyGuru Malaysia’s property listings surged by 100 percent by the closing of 2013 and it is now at about 320,000, ranging from cosy studio apartments to commercial properties. Website visitors had also rose by 70 percent to 18.6 million, while page views climbed by 97 percent to a whopping 131.3 million, according to Google Analytics,” said Gerard Kho, Country Manager of PropertyGuru Malaysia.
There was also a promising hike on the number of agents as the second half of 2013 saw almost 50 percent hike for Malaysian agent memberships and across all countries netting a total of 28,265 paying agents year ending.
Reflects Steve Melhuish, Co-Founder and Chief Executive Officer of PropertyGuru: “2013 has seen continuous growth for the Group in Singapore, Malaysia, Thailand and Indonesia. PropertyGuru Malaysia is shifting towards becoming a leading brand in Malaysia in 2014 by establishing a solid presence in the digital property portal platter. Taking the role of a competitive market leader in full force.
Challenging Times Ahead for Local Property Market
In a study conducted by PropertyGuru Malaysia on consumers’ sentiments towards the local property market, there is a decrease in purchase intent for properties across all categories due to the towering cost of home ownership. Homes in Malaysia are now deemed less affordable, and the overall satisfaction towards the local property climate has declined from 37% in Q2 2013 to 32% in Q4 2013, with overpriced, unreasonable pricing in comparison to property conditions, as well as rapid increase of property prices being the top three factors of dissatisfaction.
“The average household income of Malaysians comes up to an average of RM5,000. Unfortunately, the property price affordability benchmark stands at a range of RM300,000 – RM600,000, backed by an accolade of underlying factors such as household debts, Real Property Gains Tax (RPGT), the Goods and Services Tax (GST), oversupply and Under Construction Risks. As a result, many Malaysians face difficulties in obtaining their own property of choice and are often overwhelmed by the factors that surround their purchasing decisions,” said Kho.
Developers and potential property buyers will soon face greater challenges while purchasing their desired real estates, as the government and related agencies are implementing measures that are in-line with the current state of local property industry. Under Budget 2014, Prime Minister Datuk Seri Najib Tun Razak announced that the real property gains tax (RPGT) has increased to 30% for buyers who sell their home within five years from the time of purchase. The property price threshold for foreigners to RM1 million, which took effect this year.
In addition to RPGT, Goods and Services Tax (GST), too, will pose challenges ahead for both property developers and customers as construction materials are subject to the said tax, which will ultimately increase prices of homes after the GST is introduced in April 2015, despite the fact that residential properties are exempted. Low-income earners will feel the brunt of this tax, coupled with higher inflation and living expenses, especially in urban areas.
Gerard Kho, Country Manager of PropertyGuru Malaysia, however, provides a different perspective on the implementation of the GST.
“In spite of the expected home price hike, the GST and the subsidy cuts could be a boon for Malaysia in the long term, provided these measures are implemented well. Moreover, eliminating the subsidies would result in a free economy, which in turn will lead to higher income for Malaysians,” said Kho.
In order to control the country’s rising household debt, Bank Negara Malaysia abolished the interest capitalisation scheme and the Developers Interest Bearing Scheme (DIBS). Local lenders are also required to fix their loan-to-value (LTV) ratios based on a property’s net selling price rather than gross selling price.
While these measures are prudent, they do not address the right issues, one of which is incoming supply that is slow and expensive due to the long approval process. First-time home buyers will be most affected by the new rules, as they will need to fork out a larger down payment.
This is also expected to result in sluggish sales, but genuine buyers will remain and be persistent about purchasing their desired homes. As for the builders, major developers have the resources to comply with the new rules, while small and medium companies could adopt a ‘wait-&-see’ approach.
Opportunities for Investors and Local Developers
With the growth of 50 percent of active agents on board with PropertyGuru Malaysia and leveraging on its Singapore home-turf where PropertyGuru is the dominant #1 property portal; PropertyGuru Malaysia is also attractive to local developers that are looking to partner with the brand that can offer the largest quantum access to affluent investors in the APAC region.
Thousands of quality visitors attended PropertyGuru’s quarterly Malaysia Property Show, which was held at Marina Bay Sands on 15-16 March 2014. Upcoming exhibitions are scheduled once every quarter. Visitors of the June exhibition can expect to be marvelled as the show will feature the Penang Pavilion – a showcase and focus on the dynamic properties within Pearl of the Orient – as well as a wide variety of property exhibitions by notable developers.
“The event was a perfect opportunity for Malaysian developers, especially those in the luxury segment especially with the implementation of RM1mil threshold on foreigners, to reach out to cash-rich Singaporeans, who are weary of the property cooling measures in their home country, said James Sundram,” Managing Director for PropertyGuru International Market.
As a property search specialist, PropertyGuru.com.my aims to use its strengths in having the most updated listings in the market by enlightening its mass audience with a wide wealth of information in finding the right property for them. PropertyGuru.com.my bears the task of offering useful and user-friendly guides on Malaysia’s property market whilst also making touch points and regular opportunities available in order for consumers to get in touch with the property expertise they need.
PropertyGuru.com.my provides the resources for customers to choose the Right Property and Right Location by making the Right Choice in order to attain their desired choice of property.
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About PropertyGuru Malaysia
Propertyguru.com.my is the fastest growing property portal in the country with offices in Kuala Lumpur, Penang and Johor. The Malaysian portal currently has over 1.5 million visitors viewing almost 12 million property pages monthly.
PropertyGuru Malaysia reported a 2.5 times growth in revenue in 2012, attributed to a large growth in agent members, real estate developers and bank clients as well as a rise of 132% in website visitors to reach more than 11 million in comparison to the same period at the end of the previous year.
2012 also saw PropertyGuru taking the lead in the mobile space in Malaysia with the triple launches of PropertyGuru Malaysia’s consumer mobile app on Android and iPhone platforms as well as the Agent app on Android. The mobile apps have proved to be highly popular since launching in Q3 2012, with both consumers app receiving more than 220,000 downloads, with over 20% of all PropertyGuru users are now using mobile phone or tablet to visit the website in Malaysia.
About PropertyGuru Group
PropertyGuru Group is Asia’s leading online property portal group used by almost 11 million property buyers, viewing over 89 million property pages and generating over 350,000 enquiries for real estate developer and agent advertisers – every month.
Headquartered in Singapore, PropertyGuru was founded in 2006 by 2 entrepreneurs with a vision to simplify the property search process and help buyers, sellers and investors make better property decisions faster. Taking advantage of Asia’s growing affluence, property demand and online explosion, it received its first VC investment funding in 2008 and most recently secured approximately $60m investment in 2012 from Deutsche Telekom, South East Asia’s largest digital investment to date. Since its launch, PropertyGuru has reported rapid growth and most recently announced a record 96% increase in revenue, 60% increase in internet users and 50% increase in paying agent advertisers to over 24,000 – in 2012.
The award winning company focuses heavily on innovation. Over the last 2 years, the Company has developed and launched 15 mobile applications in 4 countries and 3 languages which have received over a million downloads – almost 50 per cent of its users in Singapore now originate from a mobile device. PropertyGuru was also the first to integrate website with social media, first to launch Singapore’s only dedicated property newspaper with over 100,000 copies circulated island-wide every month and developing a property events platform with approximately 30 shows held annually across 4 countries addressing 30,000 potential property buyers on the ground.