KUALA LUMPUR, 15 May 2023 – In the first quarter of 2023, the Malaysian property market experienced a decline in activity, with a 5.7% decrease in total transactions compared to the same period last year.
This decline can be attributed primarily to a slowdown in the residential and agricultural property sub-sectors, which saw decreases of 6.6% and 12.5% respectively. However, the commercial and development land sub-sectors witnessed an increase in activity, with volume and value rising by 14.5% and 2.8% respectively.
Despite the overall decline, the Malaysian House Price Index (MHPI) remained relatively stable, showing a marginal annual growth of 2.0%. This stability was maintained because house prices in all states, except Sarawak, experienced growth ranging from 0.4% to 5.8%.
During the first quarter of 2023, the number of residential overhangs decreased to 26,872 units valued at RM18.31 billion. This decrease was observed in all states except Selangor, as the market absorbed the excess supply.
Looking ahead, the property market is expected to maintain a cautious sense of optimism throughout 2023. However, the gradual increase in the overnight policy rate (OPR) since May 2022 is anticipated to impact property market activity, particularly in terms of residential demand.
Furthermore, the outlook for the construction sector’s workforce and the rising prices of building materials will also influence the supply side of the property market.
Both internal factors, such as the country’s economic and financial developments, and external factors, such as the global financial and economic situation, will play a significant role in shaping the real estate sector and influencing the sentiment of industry players.