Following a contraction of 0.5% in the same quarter of last year, the Malaysian economy grew by 5% in the first quarter of 2022.
Following Bank Negara Malaysia’s (BNM) decision to increase the Overnight Policy Rate, the countries are expected to see a decrease in property purchases (OPR).
1. In Q1 Of 2022, Malaysia’s Economy Begins To Recover
GDP in Malaysia increased by 5% in the very first quarter of 2022, bouncing back from a 0.5% contraction in the same period the previous year.
According to Bernama, the government’s relaxation of fiscal restraint was a major factor in the economy’s strong performance.
As the unemployment rate continues to fall to 4.1 percent (Q4 2021: 4.3 percent), “the advancement also reflects the healing in the job market, as well as ongoing policy support,” said Bank Negara Malaysia.
A 5.3 to 6.3 percent annual growth rate is predicted for the domestic economy in 2022 by BNM Gov. Tan Sri Nor Shamsiah Mohd Yunus.
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2. Opr Hike Is A Disincentive For The Real Estate Industry
The Economy of Malaysia is Rebounding There will be a rise in OPR’s negative incentive for commercial real estate in the first quarter of 2022, as well as other measures.
Following Bank Negara Malaysia’s (BNM) decision to increase the Overnight Policy Rate, the country’s real estate market is expected to slow (OPR).
Dr Carmelo Ferlito, CEO of the Centre for Market Education, told The Malaysian Reserve that the rise in interest rates is a “negative incentive” for the property sector because, “to put it simply, it raises the cost of borrowing.”
A buyer’s mood and their general economic sentiment are both factors that influence how much their purchasing behaviour is affected, according to him.
At a time when the labour market is improving and global trade is returning, the central bank’s Monetary Policy Committee (MPC) brought up the OPR from a record low of 1.75 percent to 2 percent in response to inflationary pressures.
The rising cost of building materials is expected to put pressure on property developers’ profit margins.
To maintain its Neutral recommendation on Malaysia’s property sector, MIDF Research believes property developers will face modest margin compression due to the rising cost of construction materials.
According to the New Straits Times, a research firm blamed rising petroleum product prices for the rise in the price of building materials.
There has been a significant recovery in Malaysia’s economy. OPR will increase a negative opportunity for the real estate sector in the first quarter of 2022, among other things.
According to MIDF Research, property developers may be unable to pass on the higher cost of building materials to buyers due to the current sluggish property market. “While we reckon that real estate developers may partly pass on the higher construction materials cost to homebuyers by raising property sales prices marginally,” the company said in a note.