Despite large overhang, finance minister upbeat more Malaysian property will sell in 2019

Finance Minister Lim Guan Eng speaks during the launch of the 2018 property market report in Kajang April 30, 2019. ― Picture by Miera Zulyana
Finance Minister Lim Guan Eng speaks during the launch of the 2018 property market report in Kajang April 30, 2019. ― Picture by Miera Zulyana

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KAJANG, April 30 ― Finance Minister Lim Guan Eng is optimistic that more people will be buying Malaysian houses and commercial property this year.

He noted that 2018 property market showed a slight increase in both transaction and volume, the first increase in four years despite a bigger overhang for houses and commercial real estate compared to 2017.

“Even though the property market has been facing a slump in the past few years, the volume and value of transactions in 2018 has increased by 0.6 per cent (313,710) and 0.3 per cent (RM140.33 billion) respectively.

“This must be compared to the 11.6 per cent and 2.7 per cent drop based on the National Property Information Centre data. This is an encouraging development,” he said in his speech at the launch of the 2018 property market report here.

The residential sector saw 197,385 transactions last year worth RM68.75 billion which is an increase of 1.4 per cent in volume and 0.4 per cent in value.

Major states such as Kuala Lumpur, Johor and Penang recorded an increase of 6.8 per cent, 7.8 per cent and 3 per cent respectively. Selangor had a marginal drop of 0.4 per cent.

On the commercial front there was a significant increase in market activity with 23,936 transactions valued at RM29.51 billion which is an increase of 8 per cent in volume and 16 per cent in value.

The shop sub-sector dominated 54 per cent of commercial property transactions and 36.4 per cent of the total value. It recorded a positive movement of 5.1 per cent in volume and 11.5 per cent in value when compared to 2017.

Moving forward, the outlook on the market is expected to stabilise this year.

Lim believes the Home Ownership Campaign will contribute to this year's outlook and performance in the property market.

Despite the marginal improvement, overall sales for the residential sector dropped by 14.9 per cent to 66,040 units when compared to 77,570 units in the previous year.

“Overhang residential units in 2018 had increased by 30.6 per cent to 32,313 units worth RM19.86 billion. Unsold units under construction also increased by 30.9 per cent or 80,984 units when compared to the previous year.

“High rise homes took the bulk of the overall unsold units with 43.4 per cent. Most of these unsold homes are located in Perak with 2,905 units and Kuala Lumpur with 2,692 unsold units,” said Lim during his speech.

On the commercial side, the shop overhang situation recorded an increase of 11.2 per cent to 5,055 units valued at RM4.08 billion. Unsold under construction recorded similar upward trend to 7,233 units when compared to 5,889 units in 2017 ― an increase of 22.8 per cent.

Unsold unconstructed units registered  reduction in overhang by 16 per cent at 385 units.

Shopping complexes remained relatively stable with only a small decrease in average occupancy rate at 79.3 per cent in 2018 against the previous year figures of 81.3 per cent occupancy due to negative take up in several states especially Selangor (-32,665 square metres) and Pahang (-10,831 square metres).

Office lots also showed a marginal decrease to 82.4 per cent from 83.3 per cent.

The nation's capital marked the highest negative take up of -38,632 square metres while the other 13 states registered 80 per cent occupancy rate with Perlis registering the highest at 100 per cent office occupancy rate.

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