Asking rents to drop more as supply increases and domestic demand eases: expert
Overall rental price index declined 2.5% QoQ in 3Q23.
Real estate expert PropertyGuru expects asking rents to move southwards, especially in the private residential market, “as more projects get completed.”
In 3Q23, about 9,000 private residential units, including executive condominiums, were completed, marking the highest quarterly supply completions since 2Q16. This has pushed the overall rental supply index up by 11.3% QoQ.
Cumulatively, the number of completed units in the first three quarters of 2023 was more than three times that for the same period in 2022.
PropertyGuru expects 20,400 private homes to be completed in 2023, marking the greatest annual supply completion since 2017. 2024 will see 8,959 additional units.
PropertyGuru said the alleviation of domestic demand will also affect prices.
In 3Q23, the rental demand index fell 10.4% QoQ.
“With land borders reopened, workers from Malaysia no longer need temporary rental lodgings. As more homes get completed, the number of local households moving into their new dwellings has also increased,” PropertyGuru reported.
Overall rental price index declined accordingly, decreasing 2.5% QoQ and marking the second straight quarter of contraction.