Residential property prices to consolidate, says Rahim & Co

KUALA LUMPUR: Prices of residential properties are expected to continue to consolidate this year and 2020, according to  Rahim & Co. International Sdn Bhd research director Sulaiman Saheh

"The fact that freebies and rebates are being given by developers means that prices are coming down," he said at Rahim & Co. Property Market Review 2018/2019

Sulaiman said prices have been consolidating since 2016. 

"We expected fire sales in 2018 but it didn't happen,” he added.

The report is a nationwide coverage of the property market in the residential, retail, office, hotel and industrial segments.

Rahim & Co said in a statement the property market has yet to take an overall upward turn in movement but the decline in transactional activities have soften even more than the previous year.

It also said total transactional volume slowed down in Q3 of 2018 to -0.3% and value to -1.4%. Total volume and value of property transactions in Q3 of 2018 were 228,867 transactions valued at RM100.85bil.

Being the largest market sector, the existing supply of residential units for Malaysia stood at approximately 5.51 million units of which Selangor came on top amongst all the states with 1.52 million homes.

Johor was second with almost 800,000 homes, compared with Kuala Lumpur's 476,628 homes.

“But of these numbers, unsold units remain a hot issue with the latest statistics at at Q3, 2018 revealing a total of 43,219 overhang units worth RM29.47bil sitting idle in the markets across Malaysia – this including service apartments and small office-home office units.

Johor tops the list of overhang units at 13,761 units follower by Selangor at 7,233 units and KL at 5,114 units.

Rahim & Co said buyers lamented that these units to be out of their reach financially.

“With these vacant units remaining unoccupied, the situation may take an even more unmanageable turn should nothing be done to ease this overhang burden as Malaysia will also be expecting an incoming supply of close to half a million new homes that are already under construction,”  it said.