THE property market is expected to improve in the second half of the year despite inflation and the rise in the cost of living, the Real Estate and Housing Developers’ Association Malaysia (Rehda) said.

Its president, N.K. Tong, said this is because post-pandemic, and with better certainty in the market and economy, people are willing to invest in properties for the long- term.

“With the opening up of the economy post-pandemic, the outlook for the property market continues to improve,” Tong told The Malaysian Insight.

“In our previous half-yearly Rehda Property Industry Survey 2H (second half) 2021 and Market Outlook for 2022, members were optimistic about the first half 2022 outlook, and even more optimistic for second half 2022.

“This makes sense because people are starting to put the pandemic behind them. With that greater certainty, they become more confident in investing for the longer term into properties.”

Tong said people’s spending habits of eating out, shopping in malls and going on overseas travel are testament to their spending power.

“Properties are a bigger commitment, so that optimism to spend may lag a while,” he said.

“Hence, the optimism that we see on the streets now will probably express itself in property sales towards the second half of 2022 and beyond.”

With regard to the increased overnight policy rate (OPR) on the property market, while it may dampen purchase in the short-term, it will be offset by the opening of the economy in the long run, Tong said.

“Many are aware of the inflationary pressures that have become a persistent trend, at least for the medium term.

“People do realise that properties are a good way to hedge or stay ahead of these inflationary pressures.

“Therefore, the outlook remains positive given the current circumstances,” he added.

Yesterday, Bank Negara Malaysia raised the OPR by 25 basis points to 2.5%.

This is the central bank’s third consecutive rate hike.

It raised the OPR to 2% from 1.75% in May. In July, it was by another 25 basis points to 2.25%.

BNM said in a statement that despite continued easing in global supply chain conditions, inflationary pressures have remained high due to elevated commodity prices and tight labour markets.

The central bank said headline inflation has averaged at 2.8% year-to-date, and the extent of upward pressures to inflation will remain partially contained by existing price controls, fuel subsidies and the prevailing spare capacity in the economy. – September 9, 2022.