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Press Release: Malaysian Property Market 2019 and other reports

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MALAYSIAN PROPERTY MARKET 2019 AND OTHER REPORTS, JPPH Malaysia 2019

Jabatan Penilaian dan Perkhidmatan Harta Malaysia (JPPH Malaysia) launch nine reports today. These are Property Market Report 2019 (PMR 2019), Property Stock Report 2019, Property Market Status Report 2019, Malaysian House Price Index 2019, Commercial Space Availability Report 2019, Purpose-Built Office Rental Index (PBO-RI) Klang Valley, Johor Bahru & George Town 2019, Residential Prices Quarterly/ Yearly Update 2019, RM10 Million Transaction Property Deals Volume 16 and Estate Land Sales Report Volume 26. 

The printed version of Property Market Report will no longer be published for distribution or sale. In embracing and fostering user-friendly data sharing practice, PMR 2019 earmarks the first annual report available for free download and data tables in the report are in Excel format. Unlike before, data tables for other reports, namely Property Stock Report, Property Market Status Reports, Residential Prices Quarterly Update, and RM10 Million Deals are all downloadable in Excel format for ease of users. 

Property Market 2019 

Property market recorded a marginal improvement. A total of 328,647 transactions worth RM141.40 billion were recorded, showing an increase of 4.8% in volume and 0.8% in value compared to 2018, which recorded 313,710 transactions worth RM140.33 billion. Sectoral market activity performance improved marginally – residential (6.0%), commercial (7.2%), industrial (3.8%) and agricultural (2.0%) with the exception of development land sub-sector, which declined slightly by 1.2%. The residential sub-sector led the overall property market, with 63.7% contribution.

Residential Property 

There were 209,295 transactions worth RM72.42 billion recorded in the review period, increased by 6.0% in volume and 5.3% in value as compared with 2018 (197,385 transactions worth RM68.75 billion). Performance across the states improved in the review period. By price range, demand continued to focus on RM300,000 and below, accounting for 61.7% of the residential transaction, followed by RM300,000 to RM500,000 (21.3%), RM500,000 – RM1,000,000 (13.3%) and more than RM1,000,000 RM1 Million (3.7%). 

The overhang and unsold situation took an upturn. There were 30,664 overhang units worth RM18.82 billion, decreased by 5.1% in volume and 5.2% in value against 2018 (32,313 units worth RM19.86 billion). Similarly, the unsold under construction and not constructed improved as the number dropped to 72,692 units and 16,774 units, down by 10.2% and 15.6% respectively. 

Johor retained the highest number and value of overhang in the country with 5,627 units worth RM4.7 billion, accounting to 18.4% and 25.0% respectively of the national total. Perak came second with 5,024 units worth RM1.52 billion, followed by Selangor (4,687 units worth RM3.75 billion) and Pulau Pinang (3,353 units worth RM2.59 billion). By price range, those priced RM300,000 to RM500,000 (7,883 units) formed 25.7% while more than RM500,000 (12,528 units) formed 40.9% of the total residential overhang. 

Construction activities remained on a low tone as completion, starts and new planned supply declined. 

On the price trend, Malaysian House Price Index (MHPI) continued to increase at a moderating rate. MHPI stood at 197.5 points (at base year 2010), increased by 1.9% (3.8 points) on annual basis (2018: 193.7 points). 

Service Apartment 

Unlike the residential overhang situation, serviced apartment overhang continued to increase and formed the bulk of the property overhang. There was a total of 17,142 overhang units with a value of RM15.04 billion, up by nearly 51% in volume and 65% in value against 2018. On the contrary, the unsold under construction and not constructed improved with volume declined to 33,827 units and 7,659 units, down by 9.3% and 40.5% respectively. 

By state, Johor recorded the highest serviced apartment overhang with 71.2% share in volume (12,207 units) and 76.9% share in value (RM11.56 billion). Majority of these overhang units is in Johor Bahru district, accounting for 99.2% of the state’s overhang (12,105 units worth RM11.5 billion). The state also held 34.0% share (11,490 units) of the country’s unsold under construction.

By price, units above RM1 million formed 37.4% of the total overhang, 20.3% of the total unsold under construction and 19.5% of the total unsold not constructed. For unsold not constructed, units in the price range of RM300,000 – RM400,000 formed 33.0% of the total. 

Shopping Complex 

The retail sub-sector recorded a stable performance, recording an overall occupancy rate of 79.2%, attributed to decreased slightly from 79.3% recorded in 2018. Kuala Lumpur recorded an encouraging performance, securing more than 83.0% occupancy rate whereas Selangor slightly dropped to 82%. Johor and Pulau Pinang managed to secure an average occupancy of 75.3% and 73.8% respectively. 

Purpose-Built Office 

The overall performance of office sub-sector was less promising as the overall occupancy rate declined to 80.6% in 2019, down from 82.4% in 2018. The private office buildings recorded average occupancy rate at 74.8%; WPKL and Penang secured higher occupancy rate at 76.9% and 76.5% respectively; whereas Selangor and Johor lower than national level at 70.0% and 65.7% respectively. Private office buildings in Putrajaya recorded the lowest occupancy rate at 37.6%. 

2020 Outlook 

There may be high near-term downside risks resulting from the unforeseeable outbreak of coronavirus (COVID-19) worldwide. This may dampen the anticipated economic growth, particularly for the first half year of 2020. The globally-affected outbreak is expected to take its toll on the world economies and the Malaysian economy, in particular tourism-related sectors such as airlines, retail, food and beverage and hospitality; as well as the manufacturing and selected services sector. The magnitude of the impact on the Malaysian economy would depend on the duration and spread of the outbreak not only in Malaysia but also in other countries, especially those that are Malaysia’s major trading partners. 

Many incentives are given by the government in the effort to cushion-off the impact on the property market. However, given the challenging market coupled with the downside in consumers and business community confidence, market activity and market absorption are likely to be slow. 

Despite the economic headwinds, Malaysian property market is expected to remain resilient in the coming year. Affordable housing and finding the right solutions to the property overhang will continue to be the main agenda of the government. The close monitoring on the implementation of programmes under the National Housing Policy 2.0 (2018 – 2025) and various incentives introduced to promote home ownership among Malaysians, are expected to contain the overhang situation in the coming year. 

As Bank Negara Malaysia expects the Malaysian economy to rebound in 2021, in tandem with projected global recovery, the property market is anticipated to move in similar trajectory. JPPH Malaysia will continue to monitor and evaluate the expected impact of the pandemic on the Malaysian property market and provide advisory to the government in ensuring that the market remain sustainable. 

— End of Press Release —

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