Residential Property Price Expected To Grow 5% In 2023

Juwai IQI Co-Founder and Group CEO Kashif Ansari expect the residential property price growth to expand by 5% for the year, he said “last year, the residential market took a determined step towards post-pandemic recovery. Buyers completed 243,190 transactions worth RM94.28 billion, up by 22.3% in volume and 22.6% in value year-on-year.

“The market continues to emphasise condominiums and terraced houses. Condominium/apartment units dominated the new launches, capturing 45.0% of the total, followed by terraced houses at 42.2%. “While it is difficult to forecast such a dynamic market, we do have a base case. We believe the reduction in the residential overhang and the growth of new project launches and transactions in 2022 suggest sentiment and conditions are improving.

For 2023, Juwai said it is taking a cautious approach to predicting price changes and believes the Malaysian House Price Index could climb in 2023 by 3% to 7%. Growth of 5% is the base case. The Malaysian House Price Index (MHPI) grew 2.8% in 2022. Terraced House Prices climbed by 3.7%, followed by High-Rise prices at 3.4% and Semi-Detached homes at 2.9%. Detached House prices recorded a slight decline of 2.9%. “While the House Price Index in WP Kuala Lumpur was down marginally by 0.2%, other major states saw positive growth. Selangor, Johor and Pulau Pinang were up by 3.4%, 2.2% and 3.2%, respectively.

The property portal expects the demand for affordable housing to remain strong, which could drive transaction activity in the sub-RM300,000 price range through Q1 2024.

Trends observed in 2022 were the increase in activity with a higher volume and value of transactions compared to the previous year. The growth in residential transactions indicated a strong demand for housing and the reduction in the residential overhang is a robust and positive sign said Juwai. Vverhang fell by 24.7% in volume and 19.2% in value to 27,746 units worth RM18.41 billion as at Q4 2022.

Overhang properties can put downward pressure on real estate prices and transaction activity. As the market absorbs this unsold supply, we can better balance supply and demand. That supports price growth and further growth increase in transaction activity. “New launches performed moderately well in 2022, with more than 54,000 units launched, and approximately 36% of these finding buyers. WP Kuala Lumpur is the best-performing market for new launches, with 47% of new are sold. In Johor, 43% of new units sold, and in Selangor, 27% noted Ansari.

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