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Official. Malaysia property market transactions for 1H 2020 has dropped tremendously versus H1 2019. How much?

Malaysia Property market transactions for 1H 2020 has dropped tremendously versus 1H 2019. This was what kopiandproperty.com learnt today in JPPH’s presentation on property market Malaysia for H1 2020 in Marriott Hotel, Putrajaya. There is little need to guesstimate. All the numbers below are official numbers from NAPIC.

It has dropped… total units and price for 1H 2020 vs 1H 2019

Statistically, 1H 2020 showed that the total Malaysia property market transactions for 1H 2020 was 115,476 units valued at RM46.94 billion. This was 28% lower in total units when compared to 1H 2019 which was 160,165 units. Value wise, it’s 31.5% lower versus 1H 2019 value which was RM68.53 billion. Briefly, this meant that the average value for every transaction is lower for 1H 2020 versus 1H 2019. It was RM406,491 on average for H1 2020 versus RM427,871 in H1 2019.

Malaysia property market transactions
Photo by Negative Space on Pexels.com

Residential unit transactions are 65.2% of the total Malaysia property market transactions followed by agriculture with 20.1%. When it comes to the total value of transactions, residential units’ share is 54.6% versus 18.1% for commercial units.

Some key numbers for residential property includes the following:

#1 – 1H 2020 had 75,318 transactions worth RM25.61 billion. This is a 24.6% drop in volume and 26.1% drop in value. Again, this has showed that the average prices of the properties being transacted are dropping.

#2 – Number of new launches in 1H 2020 were far fewer than in 1H 2019. Only a total of 13,294 units were launched, down by 43.6% against 23,591 units in H1 2019. Compared to 2H 2019, this number were still lower by 31.6%. 2H 2019 new launches were 19,444 units.

#3 – 92% of all sales were for units priced from RM400,000 and lower. (Now we know the price range most Malaysians prefer)

#4 – LANDED property launches beat the high-rise units. Single-storey and 2-3 storey terraced homes contributed 55.6% (7,389 unit) versus just 20.7% (3,951 units) for condominiums / apartments.

#5 – Residential overhang has increased by 3.3% versus 2H 2019. There are now 31.661 overhang units versus 30,664 units in 2H 2019.

#6 – Malaysia House Price Index (MHPI) showed a 0.4% increase for 2Q 2020 this is the LOWEST annual growth since 2010. When compared to 1H 2020, this is a decrease of 0.7%.

I will be writing another article with more details about the residential property market numbers by different states but for now, let’s also understand that the numbers for Malaysia property market transactions which was revealed today has showed that when Movement Control Order (MCO) was implemented, this has caused the property market to drop drastically. This was also coupled with the Malaysian economy but this is expected to start recovering in 2H 2020.

Penjana’s initiatives will also be lending help to the property market too. These include the reintroduction of Home Ownership Campaign (HOC), exemption for the Real Property Gains Tax (RPGT) and well as the relaxation of the 70% financing margin limit for third housing loan onwards.

For first-time home buyers, there’s still time to look around and do strive to look for the best property which meet the needs. Anticipating further drop in prices? If we look at how bad was 2H 2020 and the property prices hardly moved, let’s note that a soft recovery is not likely to show a drastic drop in property prices. By the way, selectively there are surely some desperate owners selling below market value. Ask your friendly real estate negotiator to help you look for them.

We need to also note that developers have also slowed down their new launches and this meant that they are now focusing on selling the remaining launches instead. This is why there are many good offers around. This is also one reason why Malaysia property market transactions are down as well. Many times, if you did not like that property many months back, you may still not like the property today despite receiving higher discounts.

To those who believe that no one is buying, the total transactions of over 75,000 residential units is already great evidence that most people are buying because they need a home and not because they are speculating. These days, flippers are more likely to be found in the stock market and not the property market. I am personally happy and optimistic that the worst should be over unless COVID-19 situation gets worse.

In terms of recovery, let’s note that 2020 will definitely be a challenging year. Most businesses have lost 3-6 months of productivity and this cannot be reversed by relying on just Q4 2020. Perhaps we need to look into 2021 instead for a much more stronger recovery for Malaysia property market transactions. That’s great enough for me. Happy understanding.

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Next suggested article: Why we may not want to push prices down for everyone

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of kopiandproperty.com He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. kopiandproperty.com is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

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