Residential transactions make up an average 75% of overall property transactions, according to the NAPIC numbers. All four states recorded a drop in transactions with Kuala Lumpur deals decreasing 15.7% against the last quarter of 2013. The number of deals completed this year is also lower than a year ago, confirming grouses by real estate consultants that the market has been softening since a year ago. Still on the Kuala Lumpur market, the number of properties below RM300,000 is becoming increasingly limited, which explains why transactions for such properties are decreasing.
Siders says there is “room for correction” in the overall high-end residential market.
NAPIC research shows that the greatest number of transactions are for properties priced between RM500,000 and RM1mil. Overall, the total value of properties transacted dropped for all price segments with the exception of properties costing RM1mil and above.
There are a couple of ways how one may read this - people are either holding on to their cash waiting for prices to fall or they may want to buy but have difficulties getting a loan.
Raine & Horne executive director Lim Lian Hong says transactions have been slow since last year, particularly in the secondary market.
“The drop (in overall market) may continue into the second quarter,” says Lim, adding that many properties have moved into the RM1mil and above segment.
Condominium units dominate the residential sector with transactions accounting for 70% of the market compared with 30% for landed units. Increasingly, developers are resorting to building high rise as this is more lucrative. Condo units are being priced about RM700,000 per unit this year compared with about RM600,000 a year ago.
Prices of double and 2.5 storey terraced housing continue to climb from an average of about RM700,000 a year ago to about RM900,000 in the first quarter of this year. A note of caution is needed here. These prices are average figures, not absolute numbers.
Commercial property transactions also showed a general downward trend in the city.
The softening market is evident in Selangor’s residential market.
“We are seeing a slowing down of transactions in Selangor,” says Lim, with transactions dropping compared with a year ago and against the last three months of 2013.
Volume is concentrated in the RM500,000 to RM1mil range. The indication is that developers are offering housing within this price range.
Most of the high-rise units transactions are concentrated in the district of Petaling although Selangor includes Klang, Kuala Langat, Kuala Selangor, Sabak Bernam, Gombak, Hulu Selangor, Hulu Langat and Sepang.
The pricing of average high-rise units have also risen ranging from about RM280,000 a year ago to about RM330,000 for the first quarter of this year, an increase of about 17%. This has to be read with the big picture in mind as units in Petaling are considerably higher.
