Malaysia’s property market witnessed a price correction as more affordable houses were launched during the first half of 2020.
In 1H 2020, 50% of new launches, or 6,657 housing units, were priced at RM300,000 and below, houses priced from RM300,001 to RM500,000 accounted for 28.9% (4,476 units), while those priced over RM500,000 made up 21.1% (2,161 units), reported Bernama.
“So we see that the market has done its own correction. In the past years, we have seen more of new launches in the higher range but now we are seeing more new launches in the range of RM300,000 and below,” said National Property Information Centre (NAPIC) Director Aina Edayu Ahmad during her presentation on the Overview of the Malaysian Property Outlook at the 13th Malaysian Property Summit.
Aina Edayu was representing NAPIC Director-general A’zmi Abdul Latif.
However, she noted that new residential launches plunged 43.6% to 13,294 units in 1H 2020 from 1H 2019’s 23,591 units.
Despite this, the residential sector continued to be the major contributor to the property sector, making up more than 65% of the total volume and almost 55% of total value.
She revealed that Johor and Selangor have the highest concentration of properties in the commercial, industrial and residential sector.
“In terms of pricing, properties priced RM300,000 and below in the residential segment are still capturing most of the market demand, which is why we should focus on having more affordable houses in this price range to allow the national aspiration to be achieved,” said Aina Edayu as quoted by Bernama.
But while demand for affordable homes is high, affordability is another matter since it is subject to loan approvals, she noted.
On residential property overhang, Aina Edayu revealed that the number of unsold residential properties increased to 31,661 units worth RM20.03 billion in 1H 2020 from 2H 2019’s 30,664 units worth RM18.82 billion.
Of these, 21,683 units were serviced apartments with a value of RM18.64 billion, up 26.5% in volume and 32.8% in value from 2H 2019’s 17,142 units worth RM15.04 billion.
Aina Edayu observed that the serviced apartment overhang has been increasing over the years.
Units priced from RM600,000 to RM900,000 made up 47% of the total overhang units, while those priced above RM1 million accounted for 28.2%.
Johor has nearly 16,000 unsold serviced apartments, of which 34.3% are priced above RM1 million, she said. Selangor, on the other hand, has 2,400 unsold serviced apartments, of which 40.8% are priced between RM500,001 and RM600,000.
“Data also showed that properties over the RM500,000 price range accounted for about 69% of the overhang service apartment units,” Aina Edayu added.
Looking ahead, she expects the property market to be influenced by various uncertainties, including COVID-19, the country’s political stability and pace of economic recovery.
“Although data did show some upturn in market activities earlier in the year, we would see a soft property market for the rest of 2020,” said Aina Edayu.
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