Residential property sector turns the corner

The number of unsold houses in Malaysia fell for the first time since 2002, reflecting a buoyant property market, a deputy minister said.

"The overhang value stood at RM3.82 billion. Compared to last year, the overhang volume dropped by 6.9 per cent, while the value reduced by 8.8 per cent," Deputy Finance Minister Datuk Kong Cho Ha said.

He was speaking at the launch of the 2007 property market report in Kuala Lumpur yesterday.

Last year, total property transactions rose nine per cent to 309,455 while the value of these deals jumped by a quarter to RM77.14 billion.

The market was dominated by the residential sub-sector, making up 65 per cent of the deal volume and 47 per cent of the total value.

This was followed by property deals in the agriculture sector, which made up almost a fifth of transactions.

Commercial property deals made up nine per cent of the market, development land at 4.5 per cent and industrial property at 2.6 per cent.

Sales of new houses were better as overall take-up rate was 45.1 per cent.

"Houses priced below RM200,000 were well-received by the market, accounting for 65 per cent of the units sold. Terraced houses remained popular among buyers, as evident from its 51.7 per cent contributions to the total new launches," he said.

Kong also noted that prices of residential properties were sustained at a healthy level, with the Malaysian All Houses Prices Index rising by 4.8 per cent to 124 points last year.

Correspondingly, he said, the price of the "average" house rose by 2.2 per cent to RM173,998 in 2007. Kuala Lumpur had the highest price in the country at RM393,211 followed by Selangor at RM253,225.

As various government measures were introduced in 2007 under the Budget 2008 announcement, Kong said the actual effectiveness of these measures could be evaluated this year.

The government had scrapped the real property gains tax and allowed monthly withdrawals from the Employees Provident Fund, among others.

By New Straits Times (by Kamarul Yunus)