Malaysia property market drops in volume but rises in value

KAJANG: The Malaysian property market last year saw a 0.7% drop in total volume of transactions and a 3.6% increase in total transaction values.

As at 4Q12, the All House Price Index increased to 175.3 points against 161.9 points in 4Q11, according to the 2012 Property Market Report published by the Valuation and Property Services Department of the Finance Ministry.

“The property market is resilient and will remain resilient in the days to come,” said Treasury secretary-general Datuk Seri Dr Mohd Irwan Serigar Abdullah at the launch of the report yesterday.

The report showed that market activities moderated in 2012 with 427,520 transactions worth RM142.84 billion compared with 430,403 transactions worth RM137.83 billion in 2011.

Irwan acknowledged that prices of housing in urban areas have gone up.

“Those living in major cities like Kuala Lumpur and earning RM3,000 and below can only afford an apartment. If you want to own a terraced house, you must move to the outskirts like Kajang and Dengkil and use public transport to get to work.

“This is exactly why we are expanding public transport services to the outskirts, so low and middle income earners can live there. But if you want to own a house in the city centre itself, that’s impossible,” he said.

The residential sub-sector continued to spearhead market activity, accounting for 63.8% of the overall transaction volume and 47.4% of the overall transaction value. Last year saw 272,669 residential property transactions worth RM67.76 billion, a growth of 1.1% and 9.6% respectively.

Houses made up the bulk of residential transactions at 82.9% (226,105 units). Terraced houses remained the most popular at 36.4% (99,381 units) of residential transactions. Selangor, Johor and Perak were the three main contributors to this segment. Condominium and apartment units made up 15.4% (41,960 units) of the total transactions.

The report said 57,162 residential units were launched last year compared with 49,290 units in 2011, with an improved sales rate of 47.7% from 46.3% in 2011. Kuala Lumpur, Selangor, Johor and Perak were the main contributors.

Of the newly launched houses, terraced units made up 39.7% (22,717 units), comprising 8,466 single-storey and 14,251 double- to three-storey units. The take-up rate for terraced units was 46.4% (10,537 units). Condominium and apartment units made up 38.9% (22,205 units) of new launches, registering sales of 55.1%.

The number of overhang units fell 23% to 15,091 units in 2012 from 19,607 in 2011. Total transaction value slipped 3.5% to RM4.74 billion against RM4.92 billion in 2011.

The supply of residential units rose 9.6% to 72,195 units from 65,866 units in 2011.

The commercial sub-sector saw 41,082 transactions worth RM27.79 billion in 2012. Shops were the main contributor accounting for 54.5% (22,389) of total transaction volume and 49.2% (RM13.67 billion) of transaction value.

The performance of shopping complexes slipped slightly in 2012. The national occupancy rate dipped to 79.1% in 2012 compared with 79.5% in 2011. At end-2012, Malaysia had 12.07 million sq m of retail space with Selangor remaining the biggest retail space provider with 24% (2.9 million sq m) of the nation’s total.

Purpose-built office space saw a sustained market with an equal number of transactions recorded while value improved slightly to RM1.31 billion in 2012 from RM1.14 billion in 2011. The annual take-up however, more than halved to 223,797 sq m in 2012 from 561,749 sq m in 2011as more supply came on the market.

On the economic front, the economy is expected to expand strongly between 5% and 6%, supported by the prospects of an improved global economy and the Economic Transformation Programme.

As at November 2012, there were 23 entry point projects worth RM6.68 billion of investment.

According to Irwan, going forward,  infrastructure projects like the ongoing mass rapid transit project will push the need for new housing areas and new office spaces.

This article first appeared in The Edge Financial Daily, on April 19, 2013.

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