Residential property sales in Malaysia this year to be record high since 2016, says real estate agent

Opalyn Mok
A general view of the George Town skyline, September 20, 2019. — Reuters pic

GEORGE TOWN, Nov 13 — The housing market in the country is expected to be at a record high by the end of this year since 2016, a real estate agent forecasted today.

Raine & Horne International Senior Partner Michael Geh predicted that a RM71.03 billion worth of residential properties will be sold by the end of 2019.

The registered surveyor said a total 204,840 units of properties are expected to be sold for the whole of 2019.

“This will be the highest number of transactions in four years,” the Fiabci Malaysia president said.

Fiabci is an international real estate federation.

He said this will be an increase of 7,455 transactions compared to the total 197,385 transactions recorded for residential property last year.

The value of residential property transactions last year totalled at RM68.75 billion.

“A majority of the transactions are in the secondary market, but we can see increases in sales in both the primary and secondary markets,” Geh said.

The primary market refers to new property launches while the secondary market refers to the resale of pre-owned properties.

He attributed the bullish residential property market this year to the housing policies introduced by Putrajaya such as the Home Ownership Campaign.

“Positive policies to spur the housing industry have been effective to move the market in the first half of the year and this trend is expected to continue for the rest of the year,” he said.

He said the reduction of threshold prices for foreign purchasers from RM1 million to RM600,000 will continue to give positive impacts to the housing market next year.

When asked about the residential property glut and overhang, Geh said this only affects projects located in less sellable locations.

“Property stocks are dependent on land economics so projects that are in a desirable location are easily sold compared to those located in inaccessible, poor connectivity areas,” he said.

Geh added that there will be overhang units if these properties are built-in undesirable locations as people would not want to buy and live in such areas.

He defined undesirable locations as places without proper infrastructure and public transport connecting it to the cities and areas that are too far from facilities and amenities.

Over in Penang, Geh also predicted that the state will record the highest total transactions in three years.

He estimated the total residential property transactions in Penang for 2019 to reach 12,956 units worth a total RM5.5 billion.

Last year, only a total 12,552 transactions valued at RM5.47 billion were recorded in Penang.

He said the increases are noted in both the primary and secondary markets.

He estimated a total of 984 transactions valued at RM480 million are expected in the primary market while a total of 11,952 transactions valued at RM5.02 billion are expected in the primary market for 2019.

“A majority of the residential property transactions in the first half of 2019, at 68 per cent or 4,112 units, are made up of properties valued at below RM400,000 while the remaining are of properties priced above RM400,000,” he said.

Only 6 per cent or 390 units of the transactions are for properties priced above RM1 million, 17 per cent or 1,023 units for properties priced between RM500,000 and RM1 million and 9 per cent or 514 units for properties priced between RM400,000 and RM500,000.

A majority of the properties transacted are two to three-storey terrace houses (18 per cent), flats (17 per cent), low-cost flats (16 per cent), condominiums and apartments (16 per cent) and single-storey terrace houses (11 per cent), he said.

“Most of the properties sold are in the Northeast district on the island (32 per cent) and this is followed by Central Seberang Perai (25 per cent), North Seberang Perai (17 per cent), South Seberang Perai (14 per cent) and Southwest district on the island (12 per cent).

Geh said Penang has a total of 3,929 units of overhang residential properties as at the first quarter of 2019 with a large number of it — 2,621 units — being condominiums and apartments.

This is followed by 364 units of two to three-storey semi-detached houses, 240 units of flats, 227 units of detached houses, 200 units of two to three-storey terrace houses, 152 units of low-cost flats, 92 units of townhouses and 33 units of single-storey semi-detached houses.

“A majority of the overhang units are on the island with 40 per cent in the Northeast district and 36 per cent in the Southwest district as at the second quarter of 2019,” he said.

The percentage of overhang units on the mainland as at the second quarter of 2019 was 16 per cent in Central Seberang Perai, four per cent in North Seberang Perai and four per cent in South Seberang Perai.

He said there was a large number of unsold units for residential properties still under construction which totalled at 9,907 units as at the first quarter of 2019.

“A majority of these are condominiums and apartments (8,956 units), to be followed by two to three-storey terrace houses (406 units), two to three-storey semi-detached houses (223 units), low cost flats (207 units), flats (79 units), detached houses (29 units) and cluster houses (7 units),” he said.

Most of these units under construction that are unsold are on the island (78 per cent) while the remaining are in Central Seberang Perai (11 per cent), South Seberang Perai (8 per cent) and North Seberang Perai (3 per cent).

Geh said the federal government’s policy to spur the residential housing market and to clear the overhang meant that the residential property market will continue to be strong next year.

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