Residential market’s first signs of recovery since 2012

KUALA LUMPUR (April 27): The slight uptick in the volume of residential property transactions in 2014 points to the first signs of a recovery since the segment’s “continuous dip” from 2012, says Raine & Horne International Zaki + Partners Sdn Bhd senior partner Michael Geh (pictured).

He was commenting on the National Property Information Centre’s (Napic) recently released Property Market Report 2014. Napic records last year’s annual residential property transaction volume as inching up 0.4% to 247,251 units, compared with a 9.7% contraction to 246,225 units in 2013.

“This could mean that the residential property market has hit bottom in 2013 and has been looking up since mid-2014,” said Geh in a statement dated April 23.

He says that in 2014, primary market sales volume rose 30.56% to 12,587 units, while sales value jumped 50.38% to RM20.94 billion.

Geh attributed the higher volume to the “last minute rush” to buy a home before the Goods and Services Tax (GST) was implemented in April.

“[However], this does not mean the GST will negatively affect the property market this year,” he says.

In contrast, however, secondary market transactions continued to decline since 2012. There were 193,474 units transacted last year, down by 5.9% from 2013.

However, the value of secondary market transactions continued to climb from 2012.  Transactions were valued at RM62.12 billion last year, up 6.8% from 2013.

“It is hoped that Bank Negara will relax some of the loan requirements for first-time home buyers. This will see continued interest in the residential property market,” said Geh.

In Penang, total property transactions rose by 4.01% to 18,410 units last year from 17,700 units in 2013.

Its primary market showed a 48.9% increase in transactions to 4,095 units last year, whereas the secondary market showed a drop in transactions to 14,415 units last year.

Sales of properties priced below RM200,000 dipped to 7,300 units from 7,738 units in 2013, likely due to a shortage of properties in this price range, said Geh.

In contrast, transactions of properties priced between RM200,000 to RM500,000 rose by 12.5% to 6,537 units from 5,809 units in 2013.

Meanwhile, there was an increase in sales of properties priced from RM500,000 to RM1 million, and above RM1 million. Transactions of properties in the former category increased by 15.4% to 3,245 last year, while those in the latter category saw 1,328 transactions, or 30 more than in 2013.