KUALA LUMPUR: Malaysia’s property market activity has declined by 5.7 per cent in the first quarter (1Q) of 2023 with more than 89,000 transactions worth RM42.31 billion compared to the same period last year, said the Ministry of Finance (MoF).

According to the National Property Information Centre (NAPIC), MoF, the total transactions in 1Q 2023, however, increased slightly by 0.8 per cent.

“The decrease in activity in the residential and agricultural property sub-sectors at a rate of 6.6 per cent and 12.5 per cent respectively compared to last year affected the performance of the overall property market.

“Nevertheless, the increased activity in the commercial and development land subsectors, which increased by 14.5 per cent and 2.8 per cent in volume and 22.1 per cent and 30.4 per cent in value respectively, offset the overall decline,” it said in a statement today.

According to NAPIC, the Malaysian House Price Index (MHPI) stood at 210.1 points (RM453,365 per unit) in 1Q 2023 with a marginal annual growth of 2.0 per cent, almost similar to the pre-pandemic growth.

It said the growth ranging from 0.4 per cent to 5.8 per cent, which was recorded in all states except Sarawak, has stabilised the overall house price index.

“High Rise Unit Price Index recorded an annual growth of 5.3 per cent, supported by the double digit increase in the Petaling area (Selangor) and island parts (Penang).

“The Terraced House Price Index recorded a growth of 2.3 per cent while the Detached House Price Index and Semi-Detached House Price Index recorded a slight decrease of 2.2 per cent and 0.2 per cent respectively,” it added.

Meanwhile, the centre highlighted that the number of residential overhangs decreased to 26,872 units worth RM18.31 billion in 1Q 2023 as a result of market absorption in all states except Selangor.

“The volume and value of residential overhang decreased by 3.2 per cent and 0.5 per cent respectively compared to the fourth quarter of 2022.

“The serviced apartment segment also saw a marginal decline in the number and value of overhang units by 3.0 per cent each to 23,267 units valued at RM19.59 billion,” it said.

In the meantime, NAPIC noted that the property market is expected to remain cautiously optimistic in 2023.

It said the gradual increase in the overnight policy rate (OPR) since May 2022 is expected to have an impact on property market activity, particularly on residential demand.

“In addition, the outlook of the workforce in the construction sector and the increase in prices of building materials will also affect supply.

“The country’s economic and financial developments are the internal factors that will have an impact on the real estate sector and the sentiment of industry players as well as the external factors such as the global financial and economic situation,” it said. – Bernama