The real estate sector saw improvement both in terms of transactions and value this year compared with 2021, supported mainly by the resumption of economic activities across the board and the reopening of the country’s international borders.
The National Property Information Centre (NAPIC), which comes under the Valuation and Property Services Department revealed that over 188,000 transactions worth RM 84.40 bn were recorded in the first half of (H1) 2022, an increase of more than 30 percent in volume and value compared to the same period previously.
The residential property sector recorded 116,178 transactions worth RM45.62 billion in the review period, an increase of 26.3 percent in volume and 32.2 percent in value year-on-year (y-o-y). Penang, Kuala Lumpur, Johor, and Selangor remained the four major states, accounting for 47 percent of the total national residential volume.
The commercial property segment recorded 15,169 transactions valued at RM14.02 billion, up by 45.4 percent in volume and 28.3 percent in value compared with the same period in 2021. Selangor contributed the highest volume and value to the national market share with 26.5 percent in volume (4,025 transactions), and 33.5 percent in value (RM4.70 billion). The first half of 2022 saw more than 10,000 newly launched units, down by 66.7 percent against 31,687 units in H1 2021. NAPIC said 20.3 percent of newly launched units were sold, slightly lower than the 20.6 percent recorded in H1 2021, and 8.1 percent in H2 2021.
This does not mean that the sector is without challenges on the business operation side. The industry is still plagued by price hikes of building materials and labour shortage, severely affecting productivity in both the property and construction sectors, Real Estate and Housing Developers’ Association Malaysia (Rehda) said. Its Property Industry Survey for H1 2022 and Market Outlook for H2 2022 and H1 2023 revealed that fewer residential units were launched in H1 2022, recording a 26 percent decline compared with H2 2021.
Sales performance was down by five percentage points from 50 percent in H2 2021 to 45 percent in the period under review, according to its study which surveyed 150 developers.
As the global and local economies recover and open up faster post-pandemic, the real estate market particularly housing should be positive next year.
The 2007-2010 subprime mortgage crisis stemmed from an earlier expansion of mortgage credit, including to borrowers who previously would have had difficulties getting a mortgage. The easy credit both contributed to and facilitated rapidly rising home prices in the US.
Another reason supporting the real estate sector is the shift in digital currencies and equity markets, where after a cycle of between four and five years, investors are returning to the real estate market because they see it as a safer investment option. Real estate is a real asset and provides more security, he said.
