Malaysia’s property market experienced a decline in transaction value in the first quarter of 2025 (1Q2025), with a drop of 8.9% to RM51.42 billion, compared to RM56.47 billion in the same period last year, according to the latest report from the National Property Information Centre (Napic).

Transaction volume also decreased by 6.2% year-on-year, recording 97,772 transactions in 1Q2025, down from 104,194 transactions in 1Q2024, Napic stated in its Friday report.

Despite the downturn, Valuation and Property Services Department director general Abdul Razak Yusak noted that the property market is expected to remain resilient, buoyed by growth in the construction sector and a rise in newly launched residential units.

“Industry players and property developers should stay vigilant given the current market dynamics, global economic uncertainties, and evolving external factors,” he said.

Residential Overhang and New Launches

Napic reported a significant increase in new residential launches, with 12,498 units introduced in 1Q2025, more than double the 5,585 units launched in 1Q2024. However, the sales performance remained moderate, with a sales rate of 10.8%.

The residential overhang rose slightly by 1.6% to 23,515 units valued at RM15 billion, a 7.7% increase in value compared to the same quarter last year. Nevertheless, on a quarterly basis, the overhang showed improvement, with volume and value declining by 2.9% and 9.0%, respectively.

The serviced apartment sector recorded a 6.7% year-on-year reduction in overhang volume, totaling 18,246 units, while the value declined by 6.9% to RM14.61 billion. Abdul Razak noted that Johor Bahru’s serviced apartment market showed signs of recovery, with overhang units reducing by 5.6% in 1Q2025 compared to 4Q2024.

Shopping complexes also saw a slight improvement in occupancy rates, rising to 79.0% from 78.8% in the previous quarter.

Meanwhile, the Malaysian House Price Index (MHPI) for 1Q2025 stood at 225.3 points, with the average house price recorded at RM486,070, reflecting a modest annual growth rate of 0.9%.

Impact on Property Market

The decline in transaction value and volume in 1Q2025 may signal a period of caution for property investors. With a higher number of unsold units, developers might consider offering more incentives or adjusting pricing strategies to attract buyers. On the other hand, the rise in new launches indicates continued confidence in the market’s long-term potential. Investors are advised to monitor upcoming economic policies and market trends closely, as these factors could significantly influence buyer sentiment and market dynamics in the coming quarters.

from the desk of

Miichael Yeoh

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