The 2015 Property Market Report was recently launched by the National Property Information Centre (NAPIC), which revealed vital statistics about the Malaysian property sector. Along with the report, plenty of property-related news and predictions were brought forward.
We know it can be a hassle to browse through so many articles to catch up on the highlights of the 2015 Property Market Report, so we’ve compiled and summarised them here for you! 😉
Drop in Property Transactions
- Malaysia’s property market transaction volume fell 5.7% to 362,105 in 2015 compared to 2014, while overall property transaction value dropped by 8% to RM149.9 billion in 2015 from RM162.9 billion in 2014.
- Transaction volume for the residential sector declined 4.6% in 2015, while commercial property transaction volume was down by 10.6% in 2015. Other sub-sectors also fell in the range of 2.4% to 13%.
- Number of new property launches was down by 19.2% to 70,273 units in 2015, compared to 88,997 units in 2014.
- Nevertheless, the residential property market was still the strongest in 2015, leading the overall property market with 65.2% of total transacted volume, followed by agricultural (18.4%), commercial (8.8%), development land (5.7%), and industrial (1.9%).
- Penang is the only state to see an increase of 19% in terms of commercial property transaction value in 2015, while other major states reported double-digit declines.
Commercial Market Performance (2015 Property Market Report) -NAPIC
More Overhang Units in 2016, But More Affordable Housing Too
According to the 2015 Property Market Report, there were 11,316 overhang residential units worth RM5.9 billion, up by 16.3% in volume and 56% in value, from 9,733 units worth RM3.78 billion in 2014. Overhang units in the property market will continue to increase in 2016 if developers do not slow down on launching high-end property projects. The more high-end properties are launched, the slower the take-up rate, and this will result in the increase of unsold units in the market.
Rising building costs and land prices have contributed to soaring property prices, which are beyong the affordability of many first-time homebuyers. The general consensus is that many are unable to afford high-end properties, especially the ones who need it, which are mainly those aged 35 and below from the low- and middle-income group. Therefore, based on data provided and consumer sentiment, most developers have switched to building affordable housing priced RM500,000 and below.
The increase in offerings through housing programmes (e.g. PR1MA, PPR, etc) and housing loan schemes (e.g. MyDeposit) is expected to inject more affordable housing for Malaysian citizens with moderate income. 2016 is said to be the year of affordable housing, as more than 50% of launches in 2015 fall under the RM500,000 and below price range.
Fewer Launches Due To Soft Market and Bleak Household Sentiment
There will be fewer new property launches this year, in light of the soft property market and bleak household sentiment. According to NAPIC, the number of new launches was down 19.2% in 2015. major states such as Johor and Penang saw substantial declines in new launches, down by 42.8% (9,428 units) and 47.5% (2,348 units) respectively. Napic added that Kuala Lumpur, Selangor and Johor remained the main suppliers of new launches with a 20.6%, 18.2% and 13.4% share. In terms of property type, condominiums and apartments formed the bulk (27.7% share), followed by two-to- three-storey terraced houses (25.3%).
The residential property sector is predicted to experience further softening this year. However, demand for affordable homes is expected to increase, namely for homes below RM500,000, despite the slowdown. About 80% of transactions were for homes below RM500,000.
Flat Market for Office Space in 2016
The performance for the office market is estimated to be flat in 2016, followed by additional spaces added into the market. At the same time, the commercial sub-sector is anticipated to moderate. Pressure is expected to continue on office space rental, especially buildings with tenants related to the oil and gas (O&G) industry. However, the government is confident that the various incentives and activities in building infrastructure, and good progress in public transport networks will help to support the long-term growth of the property sector.
Related post: Possible effects of O&G companies occupying less office space in KL.
The following stats below are not from the 2015 Property Market Report, but it’s good to know too. Reported in The Malay Mail, according to PropertyGuru’s latest research findings:
- 36% of Malaysians prefer to buy new houses
- 17% will opt for secondary market
- 47% opt fo 90% home financing
- 12% successfully obtained 100% housing loan
- 25% accepted 70-80% home loans
The survey found that one of the main reasons people chose to buy new houses was because of the attractive sales packages offered by property developers. Many buyers, especially those aged 35 years and below, are from the middle-income segment who cannot afford the house prices, may not have plenty of capital or savings to cover initial purchase costs such as the 10% down payment, legal fees and moving costs, and unable to secure a loan. Besides that, many developer packages not only include low initial payments, but also include home appliances and fixtures, making the total offerings very appealing.
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