2020 National Property Market Commentary

The national property market activity in Malaysia for 2020 rebounded in the second half of the year by recording a total 180,492 transactions valued at RM72.14 billion as compared to 115,476 transactions valued at RM46.93 billion, according to the latest statistics released by the Valuation & Property Services Department (JPPH) of the Ministry of Finance Malaysia.
Residential property transactions also saw a V-curve rebound in the second half of 2020 by recording a total 116,036 transactions valued at RM40.26 billion as compared to 75,318 transactions valued at RM25.61 billion.
If we look at the number of transactions by category, a large bulk of the transactions were in the secondary market which recorded 92,097 transactions (valued at RM31.14 billion) as compared to 23,939 transactions (valued at RM9.12 billion) in the primary market for the second half of 2020.
Even in the first half of 2020, a large number of the total transactions of 75,318 units valued at RM25.61 billion were from the secondary market. The secondary market meanwhile recorded 60,529 transactions valued at RM20.03 billion in the first half of 2020 as compared to 14,789 transactions valued at RM5.59 billion in the primary market.
As for commercial properties, there was also an increase in transactions when compared to the first half of 2020. A total 12,137 transactions valued at RM11.02 billion were recorded in the second half of 2020 as compared to 8,118 transactions valued at RM8.51 billion in the first half of the year.
Industrial land was also transacted more in the second half of 2020 by recording 2,778 transactions valued at RM7.36 billion as compared to 1,980 transactions valued at RM5.41 billion in the first half of the year.
The number of development land sold almost doubled by recording a total of 11,420 transactions valued at RM5.12 billion in the second half of 2020 as compared to 6,851 transactions valued at RM3.28 billion in the first half of the year.
Finally, agricultural property also increased from 23,206 transactions valued at RM4.13 billion to 38,120 transactions valued at RM8.37 billion in the second half of the year.
Senior Partner of Raine & Horne International Zaki + Partners Sdn Bhd Sr Michael Geh says that the high rebound rates for all properties reflected the growing confidence of buyers in the property market.
“The number of transactions has increased to pre-Covid-19 level. So this is a very good sign for the industry which is expected to remain resilient,” he said.
He attributed the strong rebound to government and Bank Negara intervention, through its housing policy such as the Home Ownership Campaign (HOC), waiver of Real Property Gains Tax (RPGT) and other measures.
He also notes that many property owners also took this opportunity to transfer their properties to their children or relatives.
As for the number of overhang properties, there were a total 29,565 units of overhang residential properties in the whole of Malaysia as at the end of 2020.
The highest number of overhang properties are in Johor with 7,030 unsold properties followed by Selangor with 4,889 overhang units and Perak with 3,637 units.
Geh added that the overhang issue was due to properties being built in undesirable and unsaleable locations.
“According to developers, many of these units were also unsold and unreleased Bumiputra reserved units,” he said.
He stated that the overhang issue will not be resolved if more properties continued to be built in undesirable locations.
“These overhang units can be sold if there are special discounts and incentives offered by developers to attract buyers,” he explained.

Penang Property Market Commentary

Over in Penang, the property market has also rebounded strongly by almost doubling in the second half of 2020. A total of 9,936 transactions valued at RM4.57 billion were recorded in the second half (H2) of 2020 alone.

This is an increase in both transactions and value of properties transacted as compared to 5,836 transactions valued at RM3.25 billion in the first half (H1) of 2020.
In comparison to residential property transactions, a total of 7,443 units valued at RM2.9 billion were transacted in the second half of 2020 as compared to 4,293 transactions valued at RM1.68 billion in H1.
It is apparent that the secondary market commanded a large portion of the residential property transactions by recording 6,330 out of the total 7,443 transactions in H2. The secondary market also recorded a high of 4,025 transactions in H1 as compared to only 268 transactions in the primary market. However, the primary market saw a rebound from 268 transactions in H1 to 1,113 transactions in H2 of 2020.
Commercial and industrial properties also saw increases in transactions in H2 of 2020. A total 813 units of commercial properties valued at RM0.62 billion were transacted in H2 as compared to 511 transactions valued at RM0.69 billion in H1. Meanwhile, industrial properties saw 210 transactions worth RM0.4 billion in H2 as compared to 152 transactions worth RM0.41 in H1.
Similarly, both development and agricultural lands almost doubled the number of transactions in H2 of 2020. A total 609 units of development lands were transacted at a total value of RM0.32 billion as compared to 390 transactions valued at RM0.29 billion in H1. The agricultural lands recorded a total 861 transactions valued at RM0.32 billion in H2 as compared to 490 transactions valued at RM0.18 billion in H1.
Meanwhile, Penang only recorded a total 2,069 units of overhang properties as at the end of 2020. A majority of these units are apartments (1,559 units) with the overhang units being distributed in all four districts with 37% at Seberang Perai Tengah, 26% in Timur Laut, 19% in Barat Daya10% in Seberang Perai Selatan and 8% in Seberang Perai Utara.
A large portion of the overhang units in Penang were for properties priced above RM300,001. Incidentally, a total 675 units (33%) were priced between RM500,001 and RM1,000,000 followed by 666 units (32%) that were priced at between RM300,001 and RM500,000. There were also 579 units (28%) of overhang units that were priced between RM100,001 and RM200,000 while only a small 3% or 53 units were properties priced between RM200,001 and RM300,000.
Geh said the strong rebound in the property transactions in Penang shows the confidence of the people in the property market. He added that this was also reflected in the lower number of property overhang in Penang.
* Opinions expressed here are those of the contributor and are accurate at the time of print. This is the final article contribution from Sr Michael Geh, Immediate Past President of the International Real Estate Federation (FIABCI) Malaysian Chapter and Senior Partner of Raine & Horne International Zaki + Partners Sdn Bhd. YES expresses heartfelt deepest condolences upon the demise of this great veteran and proponent of real estate, highly esteemed for his immense contribution to real estate, who was recently laid to rest after succumbing to Covid-19.

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