According to a recent statement by the Valuation and Property Services Department (JPPH), the first quarter of 2023 (Q1 2023) witnessed a decrease in the number of property transactions compared to the last quarter of 2022 (Q4 2022). However, the total value of these transactions showed a slight increase.
JPPH reported that approximately 89,000 property units were bought and sold in Q1, reflecting a 5.7% quarter-on-quarter (q-o-q) decline. Despite this, the transaction value rose by 0.8% to reach RM42.31 billion.
The department attributed this trend to seasonal factors, as property purchases typically decrease at the beginning of the year. Additionally, the increase in the overnight policy rate (OPR) and a decline in consumer sentiment in the residential market contributed to the lower transaction numbers.
When analysing the performance of the property market on a year-on-year (y-o-y) basis, JPPH noted a 6.6% decline in residential property transactions and a 12.5% decrease in the agricultural segment, which impacted the overall market performance.
“Nevertheless, the increased activity in the commercial and development land sub-sectors, which rose 14.5% and 2.8% in volume and 22.1% and 30.4% in value respectively offset the overall decline,” it said.
Interestingly, the number of transactions recorded in Q1 2023 was higher than in the pre-pandemic days.
Despite the decrease in activity, the residential sub-sector continued to be the backbone of the overall property market with 60.5% share, recording nearly 54,000 transactions worth RM20.87 billion.
Residential property priced at RM300,000 and below accounted for 54.8% of all transactions, followed by those priced from RM300,001 to RM500,000 with 13,325 transactions for a 24.7% share. Finally, there were 11,038 transactions for properties valued at RM500,001 and above, accounting for 20.5% of the total.
Cautious sentiment among developers
Some 4,700 new units of property were launched in Q1 2023, fewer than in the previous quarter.
Johor recorded the highest number of new launches, at 2,077 units or about 45% of all launches nationwide, with a sales performance of 24.9%. Selangor was second with 791 units or 17% of total launches, with a sales performance of 37%.
Interestingly, cheaper properties, those costing below RM300,000, recorded lower sales at 25.6% as opposed to 54% for properties costing above RM500,000.
The overhang fell by 3.2% in the same period, prompting more cautious sentiments among developers who cut down on completing their projects or starting new ones.
The average price for a residential unit in Malaysia stood at RM453,365, according to the Malaysian House Price Index (MHPI). This was a marginal annual growth of 2%.
Shopping malls saw marginal increases in occupancy rates, with Selangor and the Federal Territory of Kuala Lumpur leading the charge with an 80.1% and 82.9% rise respectively.
JPPH expects the property market to remain cautiously optimistic in 2023.
It said the gradual increase in the OPR since May 2022 is expected to have an impact on property market activity, particularly on residential demand.
“The outlook of the workforce in the construction sector and the increase in the prices of building materials will also affect supply,” the department added.
