NAPIC 2015: An overall softening of the property market


NAPIC 2015: An overall softening of the property market

PUTRAJAYA 19 April 2016: According to the National Property Information Centre (NAPIC) in its “Property Market Report 2015” released today the overall property market slowed down by a marginal 5.7% to 362,105 transactions from 384,060 transactions and value down by 8% to RM149.9 billion from RM162.97 billion, against 2014.

Residential sub-sector continued to lead the overall market, with 65.2% contribution in volume and 49.0% in value.   The   sub-sector    recorded    a   slight   downturn    by   4.6%   in   volume    and correspondingly   down in value by 10.5%. The commercial, industrial, agriculture and development land sub-sectors were also on moderating path, down by 10.6%, 13.0%, 7.5% and 2.4%, respectively.

Residential Property

There were 235,967 transactions worth RM73.47 billion recorded in the review period, declined by 4.6% in volume and 10.5% in value.  Performance by states was generally on a low tone.  Major states  namely Johor and Pulau  Pinang  recorded  mark declines in market  activity,  down  by 20.4%  and  16.9%,  respectively  whilst  Kuala  Lumpur  and Selangor  recorded  moderate  declines  of 8.3% and 5.1 %, respectively.

In line with  market  softening  and  bleak  households’   sentiment,  the  primary  market reacted accordingly  as the number of new launches  reduced to 70,273 units, down by 19.2% against 2014 (86,997 units).  Most  states  particularly  the  major  ones  namely Johor and  Pulau  Pinang saw substantial  declines  in their  new launches,  each down by 42.8% (9,428 units) and 47.5% (2,348 units). The overall sales performance for the country  hovered  at 41.4%  (29,089  units sold),  lower than  45.4%  (39,491  units sold)    performance in 2014.

The residential overhang situation took a downturn  as  more  units were  recorded. There were 11,316 overhang units worth RM5.9 billion, up by 16.3% in volume  and 56.0% in value.  Johor which  held 21.9%  of the  national  overhang,  saw its overhang increased  to  2,483  units,  up by  8.5%  due  to  higher  unsold  in terrace  and  service apartment  types. On similar trend, the unsold under construction recorded an increase of 28.6% to 68,760 units due to large numbers of unsold  condominium  and service apartment  units. The fewer number of new launches partly helped contain the unsold not constructed, down by 20.5% to 10,704 units.

Construction    activities were generally   on  a  low  tone  with  the  exception   of  starts. Completions   were  down  by 25.0%  (80,850  units) whereas  starts  recorded  a 10.3% increase  (188,757  units) over 2014, as higher numbers of service apartments  in Johor Bahru (20,914  units) and Kuala Lumpur (13,197  units) commenced  construction.   On the contrary,  new planned  supply was on a four-year  low at 139,189  units, down  by 31.8%.  As at end-2015,  there were  4.93  million existing  residential  units with  nearly0.89 million in the incoming supply and 0.64 million in the planned supply. The Malaysian House Price Index sustained its moderating trend. As at Q42015, the Malaysian  All House Price Index stood at 227.5 points (at base year 2000), up by 5.8% on annual  basis.  The annual  rate of increase  for  MHPI has been on a decelerating trend  since  Q4 2013,  resulting  from  the  various  cooling  measures  to  contain  the spiraling  prices. On quarterly movements, the index points contracted by 0.8% against Q32015.

                                                     2016 OUTLOOK

  1. The economic and financial movement, both local and global will be even more challenging in 2016
  2. The residential sub- sector is expected to experience further softening in 2016
  3. Issues affordability of home purchasers will continue to top the national agenda
  4. New launches are expected to slow down
  5. The commercial sub sector is expected to be equally or more challenging
  6. The retail sector is likely to moderate
  7. The performance of office market  is expected to plateau
  8. Property sector will be able to endure this challenging period with adjustments and corrections expected from both demand and supply side


Residential property sub-sector

  The residential  sub-sector  is expected  to experience  further softening  in 2016 in view of the various internal and external  uncertainties  foreseeable  in the coming year.Issues on affordable  housing and affordability  of home purchasers will continue to top the national agenda. The  measure   announced  in budget recalibration,  that states  all new housing projects  priced up to RM300,000  be limited to first-time  house buyers.

 Commercial property sub-sector

The   commercial   sub-sector   is expected   to   be  equally   or  more   challenging   In comparison  to residential  sub-sector. The retail sector  is likely to moderate  as cautious  sentiment  on consumers’  spending lingers  at the  onset  of increasing  costs  of living. The performance  of hypermarkets looks more positive due to nature of goods sold in these premises  i.e. necessity goods. The performance of office market is expected to plateau. Downward  pressure on rental may be felt by buildings,  particularly  those with tenants  that are related to oil and gas industry.   At  the  same  time,   the  ample   office  space   supply   should   send  some cautionary  signals to the authority  before approving  new developments. The leisure sub-sector  is expected  to remain positive.  The allocation  of RM1.2 billion to  the  Ministry  of  Tourism   and  Culture  to  implement   programs   and  events  to achieve  the targeted  tourist  at 30.5 million  in 2016  may help support   the sub-sector i.e. hotel industry.

Industrial  Property  Sub-sector

The industrial  property would  remain moderate  in the coming year. The establishment of   Principal   Hub  scheme,   which   offers   multiple   advantages   to  MNCs  that  uses Malaysia as a base for their regional  and global business  operations,  will entail better prospects   for  the  industrial   sub-sector.   The  flexibility   of  the  scheme  that  allows companies  to decide  on the locations  of their preference  is another  plus point for the sub-sector.

Agriculture  Property  Sub-Sector

The  agriculture  sub-sector  is expected  to remain  stable  in the  coming  year.  RM5.3 billion allocated to the Ministry of Agriculture  and Agro-based  Industry for the proposed 2016 programmes  is expected  to support the sub-sector.


Property  sector  will  be able to endure  this  challenging  period  with  adjustments  and corrections  expected from both the demand and supply side. Although property sector may see moderation  in market activity, the slowdown  would still be manageable.






Sign up and stay updated
Get the latest property news, home solution tips, interior design ideas and property guides.
By subscribing, you consent to receive direct marketing from Malaysia Sdn Bhd (iProperty), its group of companies and partners. You also accept iProperty’s Terms of Use and Privacy Policy including its collection, use, disclosure, processing, storage and handling of your personal information.