There are friends who told me that the property developers are all in trouble. Just look at the property market. No one is buying any property. By the way, this is not true. Do ask your friends who are in the senior management in property developers. Of course, the property buying today or even these few years are nowhere near the 2009 -2012 period. However, property transactions has been on an increasing trend since 2018.
2018 was considered a turnaround. It was the first year that property transactions rose after years of declining transactions which has started in 2013 and continued until 2017. The earlier article with charts are here. 2019 Property Transactions and Prices in Malaysia. Now, as for the property transactions here in Malaysia, we need to know that primary properties (buying from developers) consist of slightly lower than 20 percent of total transactions. The rest of the transactions are all from the secondary market. Do refer to the chart below courtesy of my good friend Senior Partner of Raine & Horne International Zaki + Partners Sdn Bhd. Mr Michael Geh.
In the residential PRIMARY MARKET, a total of 37,451 residential properties worth RM15.03 billion were recorded in 2019 compared to 31,993 units worth RM12.91 billion in 2018, showing an increase by 17.1% in volume and 16.4%. This huge double digit jump was because of the Home Ownership Campaign (HOC) in 2019.
In the residential SECONDARY MARKET, a total of 171,846 residential properties worth RM57.39 billion were recorded in 2019 compared to 165,392 units worth RM55.83 billion in 2018, showing an increase by 3.9% in volume and 2.8%. Secondary properties are those which we buy directly from owners. This includes those from the auction market as well. It can even be units where the owners just got their units too.
This means that if we look at the overall property transactions, the total residential property transactions in the PRIMARY MARKET is only about 18% whilst 82% are from the SECONDARY MARKET. So now your know. Every 10 people thinking of buying a property, around 8 of them eventually bought a secondary property while 2 would prefer to buy a new property instead. Property market Malaysia is a vibrant market whether primary or secondary. The above is total for the whole of Malaysia and not just the Klang Valley.
Next suggested article: Investing out of the city you live in