Residential market overhang increases 3.3% in 1H20

PUTRAJAYA: The residential overhang in the country increased 3.3% to 31,661 units valued at RM20.03bil in the first half of 2020, compared with 30,664 units valued at RM18.82bil in the previous corresponding period, due to slow market absorption of the primary market.

According to the National Property Information Centre (Napic), the number of new launches in the first half of 2020 dropped 43.6% to 13,294 units, compared with 23,591 units in the previous corresponding period.

Sales performance was poor at 3.3%, considerably lower compared with the first half of 2019 (30.9%).

Napic said the lower new launches can be attributed to the implementation of the movement control order on March 18.

Newly launched houses priced between RM100,000 and RM500,000 dominated the market in the first half of 2020, with the RM200,000 to RM300,000 price segment leading supply with 4,022 units (30.3%).

Meanwhile, sales concentrated on units priced RM400,000 and below constituted 92% of total sales.

By property type, terraced houses dominated new launches. Single storey and two and three-storey terraces contributed 55.6% (7,389 units) in total, followed by condominium / apartment units (29.7%; 3,951 units).

Meanwhile, the serviced apartment segment, which falls under commercial property albeit its usage as residential, recorded 1,433 transactions worth RM0.97bil in the first half of 2020, forming 17.7% of commercial property transaction volume and 11.5% of total value.

It’s market performance recorded a decrease of 24.2% in volume (first half 2019: 1,891 transactions) and 25.3% in value (first half 2019: RM1.3bil).

The serviced apartments overhang continued to increase, accumulating a total of 21,683 units valued at RM18.64bil, up by 26.5% in volume and 23.9% in value.

The number of unsold under construction and unsold not constructed increased to 35,720 units and 10,874 units, up by 5.6% and 42% respectively.

The overall property sector meanwhile recorded 115,476 transactions worth RM46.94bil in the first half of 2020, a decrease of 27.9% in volume and 31.5% in value compared with the first half of 2019, which recorded 160,165 transactions worth RM68.53bil.

Additionally, Napic said the Malaysian House Price Index (MHPI) continued to grow at a moderating trend.

As at the second quarter of 2020, the MHPI stood at 198.3 points (bade year 2010), up by 0.4% annually, the lowest annual growth recorded since 2010.

However, on a quarterly basis, the index points decreased marginally by 0.7% against the first quarter of 2020 (199.7 points).