Malaysia's overhang residential units dip below 30,000 for first time in two years

• A total of 27,746 overhang units were recorded in 2022, declining by 24.7% year-on-year (y-o-y) compared with 36,863 units in 2021.
• Total overhang value also shrank 19.2% y-o-y to RM18.41 billion, from RM22.79 billion during the same period, according to the National Property Information Centre (Napic) in its Property Market Report 2022 released on Wednesday (March 15).

KUALA LUMPUR (March 15): Malaysia’s residential property overhang units dropped below the 30,000-mark for the first time in two years in 2022 amid strong growth charts in total transaction volume and value in the property market.

A total of 27,746 overhang units were recorded in 2022, declining by 24.7% year-on-year (y-o-y) compared with 36,863 units in 2021. Total overhang value also shrank 19.2% y-o-y to RM18.41 billion, from RM22.79 billion during the same period, according to the National Property Information Centre (Napic) in its Property Market Report 2022 released on Wednesday (March 15).

2022 saw the lowest residential overhang and unsold units in the property market over the five-year period starting 2018. The previous low was in 2020, where 29,565 residential units were unsold after one year of completion, with a total value of RM18.92 billion.

Notably, the total residential overhang units in 2022 are led by those priced between RM500,000 and RM1 million at 33.6%, followed by RM300,000 to RM500,000 (at 29.3%) and below RM300,000 (at 23.5%) categories.

However, while properties priced above RM1 million only constitute 13.6% of the total overhang, the segment contributes to the highest value at RM7.5 billion or about 40.7% of the total overhang units value, according to Napic.

Johor remains the state with the largest number of overhang residential properties, with 5,285 units worth RM4.33 billion, accounting for 19.0% and 23.5% of the national volume and value respectively.

This was followed by Selangor (3,698 units worth RM3.36 billion), Pulau Pinang (3,593 units worth RM2.74 billion) and Kuala Lumpur (3,429 units worth RM3.15 billion).

Nevertheless, the overhang volume in all four states declined compared to last year, mainly due to the absorption of supplies in the affordable price bracket (RM300,000 and below), said Napic.

The residential sub-sector led the overall property market activity, having contributed 62.5% or 243,190 transactions to a total property transaction volume of 389,107 transactions posted last year. The segment also recorded a total transaction value of RM94.28 billion, accounting for 52.6% of the total property transaction value of RM179.07 billion.

Overall, the residential sub-sector recorded a y-o-y growth of 22.3% in volume and 22.6% in value, compared to a transaction volume of 198,812 worth RM76.9 billion posted in 2021.

Meanwhile, new launches for residential property stood at 54,118 units in 2022, higher than the 43,860 units recorded in 2021. Of the total new launches, 29,752 units are landed properties while the remaining 24,366 units are high-rise buildings.

Vacancy rates for office and malls decline

Occupancy rates for purpose-built office and retail spaces dropped in 2022.

Vacancies for purpose-built offices decreased slightly to 78.5% in 2022, down from 78.9% in 2021, while the shopping complex’s occupancy rate moderated to 75.4% from 76.3%.

Last year, the office market saw ten new completions offering new office space of 420,000 square metres (sq m), bringing it to a total of 24.30 million sq m.

There were another 1.53 million sq m (48 buildings) in the incoming supply and nearly 0.99 million sq m (31 buildings) in the planned supply, said Napic.

As for the retail sector, ten new shopping complexes were completed in the review period, adding nearly 264,000 sq m of retail space into the market, bringing the national total existing space to 17.51 million sq m.

There were another 40 complexes (1.38 million sq m) in the incoming supply with another nine complexes (35,000 sq m) in the planned supply.