Bank Negara Malaysia (BNM) has reported that the housing market activity remained strong after a better outturn in the first half of 2019.
According to BNM, Malaysian house prices observed a moderate growth in the third quarter of 2019 due to a steady demand for affordable high rise-properties.
Income growth,formation of new households, as well as the various initiatives to reduce the cost of home ownership had further attributed to 2019’s housing demand
However, in relative to income, Malaysian house prices continues to remain unaffordable due to a pronounced and prolonged mismatch between demand and supply of residential property.
The central bank has also pointed out that risks of a sharp correction in house prices will continue to be mitigated by firm demand for housing, particularly for properties priced below RM 500,000.
In terms of demand for affordable housing units, BNM has observed the segment to continue outstripping supply by a wide margin, indicating room for further adjustments in prices, particularly for new housing stock.
However, supply re-balancing, on the other hand has been underwhelming.
Average volume of newly-launched residential properties below RM 300,000 has declined in recent quarters, despite strong demand from households.
According to BNM, latest date also indicates a declining share of new launches in this property segment.
The central bank believes if the trend continues to persists, future risks of price adjustments could increase again due to affordability constraints.