Property Insight > News release > Malaysian property market is expected to remain resilient

Malaysian property market is expected to remain resilient

Malaysian property market is expected to remain resilient in the coming year despite the economic headwinds due to the unforeseeable outbreak of coronavirus (COVID-19) worldwide.

According to Valuation and Property Services Department Malaysia (JPPH Malaysia) the government will continue to focus on affordable housing and finding the right solutions to the property overhang as their main agenda.

In a press statement released yesterday, JPPH Malaysia said the government will also continue monitoring the implementation of programmes under the National Housing Policy 2.0 (2018-2025) closely.

“Various incentives introduced to promote home ownership among Malaysians, are expected to contain the overhang situation in the coming year.

“As Bank Negara Malaysia expects the Malaysian economy to rebound in 2021, in tandem with projected global recovery, the property market is anticipated to move in similar trajectory.

“JPPH Malaysia will continue to monitor and evaluate the expected impact of the pandemic on the Malaysian property market and provide advisory to the government in ensuring that the market remain sustainable,” it said.

JPPH Malaysia has also released a Property Market Report 2019 (PMR 2019) and according to the report, property market in the review year has recorded a marginal improvement.

“A total of 328,647 transactions worth RM141.40 billion were recorded, showing an increase of 4.8 percent in volume and 0.8 percent in value compared to 2018, which recorded 313,710 transactions worth RM140.33 billion.

“Sectoral market activity performance improved marginally – residential (6 percent), commercial (7.2 percent), industrial (3.8 percent), and agricultural (2 percent), with the exception of development land sub-sector, which declined slightly by 1.2 percent.

“The residential sub-sector led the overall property market, with 63.7 percent contribution,” according to the report.

Further breakdown on the report can be found below:

Residential Property

  • There were 209,295 transactions worth RM72.42 billion recorded in the review period, increased by 6 percent in volume and 5.3 percent in value as compared with 2018. By price range, demand continued to focus on RM300,000 and below.
  • The overhang and unsold situation took an upturn with 30,664 overhang units worth RM18.82 billion recorded, decreased by 5.1 percent in volume and 5.2 percent in value against 2018.
  • Johor retained the highest number and value of overhang in the country with 5,627 units worth RM4.7 billion, accounting to 18.4 percent and 25 percent respectively of the national total.
  • By price range, those priced RM300,000 to RM500,000 (7,883 units) formed 25.7 percent while more than RM500,000 (12,528 units) formed 40.9 percent of the total residential overhang.

Service Apartment

  • Unlike the residential overhang situation, serviced apartment overhang continued to increase and formed the bulk of the property overhang. There was a total of 17,142 overhang units with a value of RM15.04 billion, up by nearly 51 percent in volume and 65 percent in value against 2018.
  • By state, Johor recorded the highest serviced apartment overhang with 71.2 percent share in volume (12,207 units) and 76.9 percent share in value (RM11.56 billion). Majority of these overhang units is in Johor Bahru district, accounting for 99.2 percent of the state’s overhang (12,105 units worth RM11.5 billion).
  • By price, units above RM1 million formed 37.4 percent of the total overhang, 20.3 percent of the total unsold under construction and 19.5 percent of the total unsold not constructed.

Shopping Complex

  • The retail sub-sector recorded a stable performance, recording an overall occupancy rate of 79.2 percent, attributed to decreased slightly from 79.3 percent recorded in 2018. Kuala Lumpur recorded an encouraging performance, securing more than 83 percent occupancy rate whereas Selangor slightly dropped to 82 percent.

Purpose-Built Office

  • The overall performance of office sub-sector was less promising as the overall occupancy rate declined to 80.6 percent in 2019, down from 82.4 percent in 2018. The private office buildings recorded average occupancy rate at 74.8 percent; WPKL and Penang secured higher occupancy rate at 76.9 percent and 76.5 percent respectively; whereas Selangor and Johor lower than national level at 70 percent and 65.7 percent respectively. Private office buildings in Putrajaya recorded the lowest occupancy rate at 37.6 percent.

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