Malaysia’s Residential Property Sales Predicted To Be Record High Since 2016
Raine & Horne International Senior Partner Michael Geh expects Malaysia’s housing market to be at a record high by this year’s end, a feat that was previously reached in 2016. The real estate agent revealed that 204,840 units of residential properties will be sold by the end of 2019 and is expected to reach a total value of RM71.03 billion.
“This will be the highest number of transactions in four years,” the Fiabci Malaysia president said.
Geh noted that the sales this year will be an increase of 7,455 transactions in comparison to the 197,385 transactions made last year, which also amounted to RM68.75 billion, reported the Malay Mail.
“A majority of the transactions are in the secondary market, but we can see increases in sales in both the primary and secondary markets,” he said.
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The primary market refers to new property launches, while secondary market refers to the resale of previously owned properties.
He attributed the strength of this year’s residential property market to the housing policies put in place by Putrajaya, such as the Home Ownership Campaign.
According to him, the reduction of threshold prices for foreign buyers to RM600,000 from RM1 million will continue to positively impact the housing market in 2020.
Geh also explained that this projection will be largely unaffected by the residential property glut and overhang, as that issue only affects projects situated 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.
Overhang units will only exist if they are built on undesirable areas as people would not want to purchase and live in such locations, he noted.
For him, undesirable locations are places lacking proper infrastructure and public transport connecting to the areas and cities too far from amenities and facilities.
Geh also predicted that Penang will have its highest total transactions in three years, with the total residential property transactions estimated to reach 12,956 units valued at RM5.5 billion this year.
He noted that 984 transactions valued at RM480 million are expected for the primary market while 11,952 transactions valued at RM5.02 billion are estimated for the secondary market.
“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.
“Most of the properties sold are in the Northeast district on the island (32%) and this is followed by Central Seberang Perai (25%), North Seberang Perai (17%), South Seberang Perai (14%) and Southwest district on the island (12%).”
Geh further explained that the federal government’s policy to goad the residential housing and to address the overhang issue market will result in a strong residential property market next year.
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