Improved property market activity in H1 2022

The volume of transactions in the propertymarket for the first half on 2022 saw a 34.5% year-on-year (YoY) changecompared to H1 2021, based on figures from NAPIC.

When the pandemic hit locally andsubsequently led to the movement control order (MCO), the volume oftransactions fell by 27.9% to 115,476 units in H1 2020 compared to the previousyear.

The volume of transactions then rose by 21%in H1 2021 despite a second reiteration of the MCO and for the first half ofthis year had reached 188,002 units as economic activities were in full swing.

The figure surpasses the volume oftransaction in the years prior to the pandemic which saw 149,862 units in H12018 and 160,165 in H1 2019.

However, the value of transactions onlygrew marginally from RM 62.01 billion in H1 2021 to RM 84.4 billion in H1 2022.

NAPIC’s Property Market Report H1 2022noted that of the total transactions, 34.3% (64,479) and 62.6% (117,655) weretransfers dated in 2021 and 2022 respectively while the remaining percentageshare was for prior years’ transfers.

It is likely the ending of the HomeOwnership Campaign (HOC) at the end of 2021 contributed to the spike intransactions for the first half of this year.

Most property transactions occurred in theNorthern Region of Malaysia with a 27.8% share followed by the Central Regionat 23.9% and the Southern Region at 21.5%. The East Coast only accounted for16.1% of property transactions while East Malaysia made up 10.7%.

Residential transactions accounted for61.8% (116,178 units) of the total volume for RM 46.62 billion in value,representing an increase of 26.3% and 32.2% YoY.

The four major states namely Pulau Pinang,WP Kuala Lumpur, Johor and Selangor formed about 47% of the total nationalresidential volume.

On the other hand, commercial transactionsmade up 8.1% of the national volume with 15,168 transactions.

Agricultural transactions made up thesecond biggest percentage at 22.1% (41,595 units) of transactions with‘development land & others’ at 6% (11,231 units) and industrialtransactions at 2% (3,830 units).

Overall, the price range of transactionsshowed growth across the board in H1 2022 in terms of YoY percentage change.Transactions above the RM 1 million saw the biggest percentage YoY change at43.3% (114,902 units) followed by the RM 500,000 – RM 1 million range with 3.9%change (25, 823 units).

Next were transactions below RM 300,000which grew by 34.7% but had by far the largest volume of transactions at114,902 and then transactions from RM 300,000 – RM 500,000 recording a 27.6%growth (35,520 units).

When isolated to residential transactions,properties below RM 300,000 also were the most transacted at 65,250 units witha 24.3% percentage growth in volume compared to H1 2021.

This was followed in volume by propertiespriced from RM 300,000 – RM 500,000 (27,480 units at 23.1% growth), then the RM500,000 - RM 1 million range (17,741 units at 36.3% growth) and finallyproperties above RM 1 million (5,707 units) also at a 36.3% growth.

When it comes to commercial transactions,most properties transacted were priced below RM 300,000 as well with 4,823units, representing a 41.7% growth.

However, commercial properties priced fromRM 500,000 – RM 1 million showed the next biggest volume at 4,316 units (46.3%growth).

While commercial properties priced above RM1 million showed the biggest percentage change in H1 2021 with 2,679 unitsmeasuring a 54% YoY growth.

Despite improvements in market activity,the outlook for 2023 remains dim as the World Bank cautions against a globalrecession brought on by increasing inflation, the Russian-Ukrainian conflict andChina’s prolonged economic restrictions.

Additionally, the volume of overhang propertiesin the local property market remains concerning. To read more about the statusof the residential overhang as of H1 2022, check out our article here