Malaysia’s property market saw demand soften with buyers approaching the residential sector with caution, according to a recently release Knight Frank report. The report also noted that values have remained relatively stable throughout the country, but volumes saw a noticeable decline.
The decline was due in part to the cooling measures introduced by the Malaysian government in order to reduce property speculation. Banks in Malaysia tightened lending restrictions and the outcome of that was a decrease in transaction volumes across the residential sector. There was a 21.2 percent drop in the first quarter of 2015 from the previous quarter. Buyers had been expected to push property purchases before the implementation of the Goods and Service Tax (GST) last April, The Star Online reported.
Supply is still high in Kuala Lumpur’s high-end residential segment, and the city will see even more units enter the market by the end of 2015. It is estimated that 3,725 units will hit the market while 1,296 units were completed in the first semester. Asking prices and rentals remain flat, particularly in the Kuala Lumpur city centre, because of the influx of supply, according to the Knight Frank report.
The condominium sector in Penang is also dealing with declining transaction volumes, but the high-end tier is still performing relatively well. The Shorefront project from developer YTL Group was able to sell out in a short time and shook the trend of a slowdown. The project was targeted at the island’s wealthy population and affluent expats.
Johor Bahru witnessed a significant drop in new launches in the first half of 2015 due to concerns of oversupply in the city’s condominium market. Quite a few developers went with landed residential projects instead while investors decided to wait to see how things play out in the city.
The first half saw no new significant projects launched in In Kota Kinabalu. A new Chinese consulate office did open in the region, and that could see the number of Chinese visitors increase, leading to a greater demand for properties, the Knight Frank reported pointed out.
