Property sector to see minor dip in volume growth in 2020


  • Business
  • Thursday, 16 Jan 2020

KUALA LUMPUR: The local property sector could experience a minor dip in volume growth in 2020 following the end of the Home Ownership Campaign (HOC) at the end of last year.

CBRE | WTW managing director Foo Gee Jen said the success of the HOC last year was an indication that there was still pent-up demand in the market.

“However, because the HOC is not being extended, we may see a year-on-year dip in volume,” he said after a briefing today on the company’s 2020 real estate market outlook.

He said the landed residential sub sector may see, at most, single digit growth this year.

“We think it will be flat or 5% growth,” said Foo.

“We also believe there will be a correction for high rise properties, especially those above RM1mil,” he added.

The full-year HOC in 2019 cleared some RM23.2bil worth of houses, surpassing the initial target of RM17bil.

According CBRE | WTW‘s Real Estate Market Outlook 2020 report, the Klang Valley’s residential sector reported an 8.7% year-on-year growth in transactions to 15,973 units and 4.2% to RM8.33bil in value as at the third quarter of 2019.

The Klang Valley’s residential overhang increased 5.1% year-on-year and 2.4% quarter-on-quarter in the third quarter of 2019 to 12,007 units.

Close to one-third of the overhang in the Klang Valley was made up of residential properties priced between RM200,000 and RM500,000.

On the office sector, the report said four new office buildings increased purpose-built office space in the Klang Valley to 111.9 million sq ft.

“Vacancy rates rose by 1% year-on-year and may breach the 20% mark by 2022, in view of the 10.23 million sq ft in the pipeline, it said.

As for the retail sector, the report said this sub segment is expected to remain “status quo” with generally healthy retail revenue and sustained shopper footfalls; same occupancy and rental rates.

“The incoming supply of retail space outside Kuala Lumpur is 5.6 million sq ft compared with 1.49 million sq ft in Kuala Lumpur city,” it said.

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