Napic: Property market saw price correction in first-half 2020

KUALA LUMPUR: The property market experienced a correction in terms of pricing with more affordable housing launched in the first half of 2020 (1H2020).

National Property Information Centre (Napic) director Aina Edayu Ahmad said half of the new launches in 1H2020 comprised houses priced at RM300,000 and below (6,657 units), while the RM300,001-RM500,000 houses accounted for 28.9% (4,476 units) and houses priced over RM500,000 accounted for 21.1% (2,161 units).

“So we see that the market has done its own correction. In the past years, we have seen more of new launches in the higher range but now we are seeing more new launches in the range of RM300,000 and below,“ she said in her presentation on the Overview of the Malaysian Property Outlook at the 13th Malaysian Property Summit here today.

She was representing Napic director-general A’zmi Abdul Latif.

Aina Edayu said new residential launches, however, recorded a substantial drop of 43.6% to 13,294 units in the 1H2020 from 23,591 units in 1H2019.

She said all property market activities across the board had decreased, leading to a major decline in the overall property sector.

“Residential sector remains as a major contributor to the property sector, accounting for over 65% of the volume and nearly 55% in terms of value,” she said.

Aina Edayu said Selangor and Johor have the highest concentration of properties in the residential, commercial and industrial sector.

“In terms of pricing, properties priced RM300,000 and below in the residential segment are still capturing most of the market demand, which is why we should focus on having more affordable houses in this price range to allow the national aspiration to be achieved,“ she said.

However, she said although demand for the affordable range is higher, affordability is another matter as it is subject to loan approvals.

She said Napic is not expecting prices to drop significantly despite the declining price in the second quarter (Q2) of 2020 against Q1 2020 as prices seem to be holding up based on the Malaysian House Price Index, which showed a gradual upward movement in price for the past five years.

On the overhang in residential units, she said in 1H2020, the number of unsold residential properties rose to 31,661 units worth RM20.03 billion, compared with 30,664 units worth RM18.82 billion in 2H 2019, most of which were high-rise residential properties.

Of the overhang units, 21,683 were serviced apartments worth RM18.64 billion, an increase of 26.5 per cent in volume and 32.8% in value from 17,142 units worth RM15.04 billion in 2H2019.

Aina Edayu noted that the overhang in serviced apartments kept escalating over the years.

Units priced over RM1 million accounted for nearly one third (28.2%) of the overhang units, while those in the range of between RM600,000 and RM900,000 accounted for 47%.

“Nearly 16,000 of the total number of unsold serviced apartments are in Johor, whereby 34.3%of them are priced over RM1 million,” she said, adding that Selangor has 2,400 unsold units; 40.8 per cent of which priced between RM500,001 and RM600,000.

“Data also showed that properties over the RM500,000 price range accounted for about 69% of the overhang service apartment units,“ she said.

On outlook, Aina Edayu expects the property market to be influenced by the high level of uncertainties surrounding it, including the pace of the economic recovery, political stability and Covid-19.

“Although data did show some upturn in market activities earlier in the year, we would see a soft property market for the rest of 2020,“ she said. – Bernama