Share
KUALA LUMPUR (April 3): Malaysian house prices, relative to income, remain seriously unaffordable, due to a pronounced and prolonged mismatch between demand and supply, stated Bank Negara Malaysia (BNM) in its Financial Stability Review for Second Half 2019 released today.
Although the central bank noted that initiatives to support home ownership have led to improvements in housing market activity and lowered the stock of unsold properties, the report said: "Still, the number of unsold housing units remains elevated with house prices remaining seriously unaffordable and demand for affordable housing units continue to outstrip supply by a wide margin”.
“Nevertheless, risks of a sharp correction in house prices will continue to be mitigated by firm demand for housing, particularly for properties priced below RM500,000. For the first nine months of 2019, these properties accounted for 83% of total transactions," it said.
It stated that Malaysian house prices (as measured by the Malaysian House Price Index) grew moderately in 3Q2019, on the back of steady demand for affordable high-rise properties priced below RM300,000.
For the whole year, housing market transactions were expected to register a stronger positive growth, volume-wise. It said income growth, the formation of new households, as well as the various initiatives to reduce the cost of home ownership, had lent support to housing demand in 2019.
"Demand for affordable housing units had continued to outstrip supply by a wide margin, indicating room for further adjustments in prices, particularly for new housing stock. Supply rebalancing, on the other hand, has been underwhelming.
“The average volume of newly-launched residential properties priced below RM300,000 has declined in recent quarters, despite strong demand from households. The quarterly average for 1Q-3Q 2019 is 6,518 units compared to the same period in 2018 at 9,777 units.
"Latest data also indicates a declining share of new launches in this property segment (1Q-3Q 2019: 35%; 1Q-3Q 2018: 37%), reversing earlier trends. If this trend persists, future risks of price adjustments could increase again due to affordability constraints," BNM said in the report.
Meanwhile, it noted that financing conditions for the purchase of residential properties remained supportive with financing growth sustained above 7% throughout 2019.
Stay calm. Stay at home. Keep updated on the latest news at www.EdgeProp.my #stayathome #flattenthecurve
