In 2022, what can home sellers and purchasers expect? Will the market continue to climb, remain unchanged, or begin to fall steadily?

There were many unknowns when the Covid-19 pandemic swept Malaysia off its feet at the start of 2020. With all of the confusion and unknowns, few could have guessed that the pandemic would lead to one of the most competitive and intense housing markets in history, spanning many economies around the globe.

When it comes to market forecasting, there will always be experts on both sides of the debate. While some analysts expect a positive picture for the 2022 real estate market, in which home prices continue to grow, others predict a negative perspective, in which home prices begin to fall. Here’s what kind of housing market outlook 2022 has in store for us.

Creeping Opportunities for Buyers

2021 was a terrific year for selling a home, but not so much for buying one. Home prices have risen dramatically, but the number of homes for sale has decreased. Although the housing market outlook in 2022 will still favor sellers, buyers will have a slightly better chance of finding their dream homes. Even while supply-demand factors ensure prices continue to rise across the country, affordability issues will prevent prices from rising at the same rate as they did in 2021.

The number of homes on the market will increase by 0.3 percent, while single-family housing starts will increase by 5%, and the 30-year fixed mortgage rate will average 3.3 percent for the majority of the year before rising to 3.6 percent by the end of the year.

Builders will have a better chance of overcoming present building material shortages, and they should be able to speed up construction to fulfill the high demand for homes. With more newly built homes on the market and more homeowners offering their properties for sale, home price growth should slow next year.

This is good news for many would-be purchasers who have been priced out or put off deciding due to a lack of supply and rapid property price increase. Mortgage supply will need to gradually expand for qualified purchasers to obtain finance for their house purchase.

Then Again, Maybe Not

With mortgage rates rising, there’s less reason for purchasers to rush into purchasing residential real estate right now.

That, on the other hand, could be beneficial to the market. As the year passes, if buyer desire begins to diminish, home prices may begin to fall.

Even still, today’s conditions are difficult for real estate investors, particularly those looking to buy income homes to take advantage of the present surge in rental demand. Those looking to add another vacation property to their portfolios in preparation for the summer rush should do the same.

Overall, investors and regular buyers will have to make a difficult decision this month: pay a premium for an existing property without a lot of mortgage savings to offset increasing prices, or postpone their plans and hope market circumstances improve as 2022 progresses.

Rising Costs and Rates

It’s clear that mortgage rates and housing prices are expected to rise in the coming months. Because this will reduce their purchasing power, Malaysians must start planning their personal finance plans as soon as possible. Increasing your credit score can assist you in obtaining a reduced mortgage rate.

You’ll need to set aside money for a down payment, closing costs, and unanticipated repairs and maintenance. It’s also a good idea to look into first-time homebuyer programs right now. If you qualify, these programs might give you thousands of Ringgit to put toward your down payment or closing fees.

Most housing markets will be competitive, though some may be more difficult than others. The ability to work from home has the potential to boost demand in some locations. Neighborhoods near large cities that are still an hour or two away may be appealing. I believe those types of regions will appreciate more quickly. This is something to consider as you choose where you want to buy.

First-timers Face a Competitive Tide

In addition, first-time buyers looking for more affordable properties may find more competition. The starter home price point is one of the more difficult divisions of the property market to break into. Builders have struggled to create enough affordable homes for a huge group of people into the coveted first-time buyer age bracket.

As a buyer, you’ll need to be patient because it’s still a strong seller’s market. You don’t want to make a hasty purchase and wind up with a home you regret. Given the increased demand for specific areas or types of homes, you may want to be more flexible with where you live and what you buy.

A condo or townhouse a little further away from where you wanted to go could be less expensive than a single-family home in a city. You may not find your dream house today, but a home that meets your needs now can serve as a stepping stone to a home that meets your needs later.

Malaysia’s Potential Price Correction?

Due to low demand with expanding inventory for newly built and existing complexes, Kuala Lumpur’s high-end condo industry might continue to see a price correction.

Similarly, low leasing demand will continue to put pressure on the property rental market. The economy is still in a slump as personal finance in Malaysia takes high priority for many, but purchasers and financiers are cautiously optimistic, and market confidence is predicted to gradually return by early 2022.

The property market is largely predicted to begin to recover as a result of a more positive outlook, as well as considerable interest from domestic investors migrating from the stock market to safer and less erratic alternative investment options.

Boosted Market Confidence

The progressive reopening of the economy, according to some experts, will assist to drive the property sector.

The normalization of post-pandemic standard operating procedures, as well as a high vaccination rate in 2022, will help bring transaction activity back up to pre-Covid-19 levels in the residential market when physical migration and housing campaigns restart.

Increased immunization rates, lessened physical confinement restrictions, and a build-up of financial savings from 2020’s expenditure-suppressed phase, will further boost consumer sentiment.

Life is Still Uncertain

We’re all curious to see what happens with Covid-19 this year and how it will affect our life, travel, and work, among other things. What effect will this have on our home-buying decisions?

Throughout 2021, housing trends changed. From an increased demand in rural areas as people seek a simpler life for their families, to a switch to city dwellings as folks were eager to return to city life. As we cautiously step forward in a world still gripped by a pandemic in 2022, it is likely that large-ish homes with green or outdoor spaces will still be popular for many families.

 

Are you planning to get a home in 2022? Share your thoughts about your market expectations with us in the comments below.

 

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