Transactions for residential properties increasing. Is your home one of them?

Transactions for residential properties increasing. Is your home one of them?

Before we start with H1 2024, let’s start with the past. Actual transactions dipped in H1 2023 versus H1 2022. Look at the image below:

We do need to note that the drop was 1 percent but the actual total transactions was still very close to 115,000 units just for the 1H alone. In other words, close to 115,000 people bought a residential property, whether from the developer or from the secondary market. As usual, secondary market is majority of all transactions.

Confidence in market is rising?

This trend was one-off and total residential property transactions has breached 120,000 units for H1 2024. Perhaps this is also showing the confidence of the people with a rising ringgit, a lot more positive news about data centers, new FDIs etc. Plus the fact that Bursa Malaysia has also been doing pretty well due to the participation of foreign funds too. If we compare H1 2024 to H1 2022 instead, the increase is lower than 6.1 percent (versus H1 2023) but is still a positive 4.98 percent.

Residential Property Price

Meanwhile, prices have increased faster. Just need to note that this is overall and it is not reflective of the actual house price even when we averaged the number versus the transactions. What is clear is that for some type of homes and some neighborhoods, the price increase is likely to have been higher than the percentage shown while for some of the other lesser favored type of homes or neighborhoods, prices could have increased only slightly for the transactions.

Who’s buying what type of residential property?

Properties of all price range have shown an increase in number of transactions with the ones above RM1 million showing the highest increase at over 14 percent. If we understand how the number goes, the units transacted under the ‘above RM1 million’ category will keep increasing because some of the ones just under RM1 million today may be RM1 million in their next transaction. Percentage wise, perhaps it would stay similar for a while if there are a lot more transactions for the lower priced categories.

Lion’s share is Selangor and Johor lah…

Just these two states already account for close to 40 percent of all transactions. I personally think this will continue as I think the rate of growth is actually increasing and that more people would be working in a few key urbanized states. In fact when we add in Kuala Lumpur numbers, the total for these 3 increase to 43 percent of all transactions.

Conclusion?

Positive lah. Numbers are up. Prices are still moving up. People need to have confidence in order to move these numbers up. Confidence cannot happen if they do not have the salary to back it up. Meanwhile salary cannot continue to rise if the demand for people does not go up. For demand for people to go up, businesses must expand or start expanding. General idea is that the economy seems to be doing well enough for all these to happen too. Happy understanding.

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