On April 17, 2008 the National Property Information Center (NAPIC) released the Malaysia Property Market 2007 report.
The Malaysian property market remained buoyant in 2007. The overall market strengthened with increases in both transaction volume and value, improved sales performance for the newly launched housing units and reduced numbers of property overhangs. However, property construction activities moderated with increased newly completed units but decreased construction starts and building plan approvals.
The market recorded 309,455 transactions valued at RM77.14 billion during the year. The transaction volume recorded a 9.0% increase (2006: 283,897 transactions) whilst value grew by 25.2% (2006: RM61.60 billion) against 2006. Residential property sub-sector remained as the most dominant sub-sector comprising 64.5% of the total volume and 47.3% of the value of transactions. Agricultural property was the second most active forming 19.4% of the market share. Commercial property, development land and industrial property subsectors followed at 9.0%, 4.5% and 2.6% of the total transactions respectively.
The residential property sub-sector remained the leading market contributor accounting for 64.5% and 47.3% of the transaction volume and value, respectively. There were 199,482 transactions worth RM36.49 billion recorded in 2007 against 182,555 transactions worth RM29.45 billion in 2006. The transaction volume and value increased by 9.3% and 23.9% respectively. However, the performance of the states was mixed. Most states recorded promising growths in the market activity with Kelantan leading the highest increase of 46.3%, followed by Perlis 35.3% and Selangor 27.2%. Selangor was the most active state capturing 0.8% (61,364 transactions) of the residential market share followed by Johor 12.0% (22,963 transactions) and Perak 11.1% (22,239 transactions).
Prices of residential properties were largely mixed with most states recording increases in preferred or choice locations. The Malaysian All House Price Index, the All House Price Index for the country was at 124.0 points for 2007. Compared to 2006, the index point increased by 4.8% (2006: 118.3 points). Correspondingly, the price of the “average” all houses increased but at a slightly lower rate of 2.2% from RM170,158 in Q4 2006 to RM173,998 per unit in Q4 2007. Kuala Lumpur had the highest price level in the country at RM393,211. Selangor and Sabah followed at RM253,225 and RM236,804 respectively.
By price range, houses priced below RM150,000 continued to be the most sought after comprising 61.5% (122,820 transactions) of the total market volume. It was observed that houses priced at RM500,000 and above appeared to be popular since 2004. Houses in this category recorded upward trend in the transaction volume from 5,491 transactions in 2004, 5,735 transactions in 2005, 7,274 transactions in 2006 to 9,661 this year. Selangor accounted for almost half (4,786 transactions) of this price category and followed by Kuala Lumpur at 30.0% (2,856 transactions).
By type, housing units formed 86.3% (172,207 transactions) of the total residential property transactions while another 13.6% (27,058) were vacant plot transactions. From the housing unit transactions, terraced units were the most favoured comprising 44.5% (88,765 transactions) of the total volume. Condominium/apartment and low cost houses followed at 10.1% (20,202 units) and 8.4% (16,812 units) respectively. Landed housing units dominated the residential market activity in most states except Kuala Lumpur and Pulau Pinang. In Kuala Lumpur, high-rise units comprising condominium/apartment, flat and low-cost flat captured 62.2% (9,380 transactions) of the market share. Whilst in Pulau Pinang, these properties collectively made up 50.7% (7,413 transactions) of the total residential property volume. Meanwhile, in Kelantan and Terengganu, vacant plots were the most prevalent forming 81.0% (2,280 transactions) and 65.7% (5,445 transactions) of the respective state’s market share.
The primary market was encouraging to record higher newly launched units as well as improved sales performance. There were 52,664 new housing units offered for sale of which 23,749 units were taken up, achieving an average sales performance of 45.1%, which is better than 40.6% recorded in 2006. Since 2002, the sales performance had been on a declining trend from 54.7% to 52.3% in 2003, 48.0% in 2004, 46.2% in 2005 and 40.6% in 2006: The improved market absorption indicated a growing confidence in the housing market. Selangor had the most number of new units offered for sale (13,723 units). Johor and Perak followed with 9,037 units and 6,668 units respectively. Combined, the three states accounted for 56.0% of the country’s new units launched. By type, terraced units comprising 13,264 single storey terrace and 13,992 units of two to three storey terrace formed 51.8% (27,256 units) of the new launches. About 44.4% (23,384 units) of the total terraced units were priced at RM150,000 and below. Perlis recorded the highest sales performance at 86.6%. Terengganu and Negeri Sembilan followed each at 65.8% and Pahang at 62.6%. However, the numbers offered for sales in these states were relatively small i.e. Perlis at 591 units; Terengganu at 412 units, Negeri Sembilan at 3,005 units and Pahang at 2,865 units. After Kedah (32.9%), Johor and Perak recorded the second and third lowest sales performance at 34.1% and 34.6% respectively. Along with the encouraging performance in the primary market, the number of residential overhang decreased by 6.9% to 23,866 units against 25,645 units recorded in 2006. Correspondingly, the overhang value reduced by 8.8% to RM3.82 billion (2006: RM4.18 billion). Johor (6,941 units), Selangor (4,053 units) and Sabah (2,447 units) were the three main states with higher numbers of overhang. By type, two to three storey terrace and condominium/apartment formed the biggest share in the overhang numbers. These property types contributed 26.2% (6,242 units) and 25.7% (6,142 units) of the residential overhang respectively.
On the supply side, the construction development of residential property was more cautious with reductions in starts and new building plan approvals albeit an increase in completions. The number of completed units increased by 4.2% from 171,448 units in 2006 to 178,608 units. Housing starts on the other hand, reduced by 7.2% to 133,866 units against 144,268 units recorded in 2006.
Likewise, new building plan approvals decreased by 10.3% from 154,703 units in similar period to 138,822 units. As at year-end, the total existing housing stock in the country stood at 4,043,040 units, incoming supply at 574,841 units and planned supply at 647,615 units.
The Valuation and Property Services Department (JPPH) of the Ministry of Finance Malaysia set up the National Property Information Center (NAPIC) upon the recommendation of the National Economic Action Council (MTEN) on 9th September 1999. NAPIC is responsible to collect, collate and disseminate information related to the property industry.
