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Malaysia Property Market Report Overview 2023

PROPERTY GUIDE

Written by Fazrina Izzma

Upon careful examination of the Property Market Report for the year 2023, published by the National Property Information Centre (NAPIC), it becomes evident that the Malaysian real estate sector has demonstrated remarkable resilience and growth amid a dynamic economic landscape. As an authoritative source of property data and analysis, NAPIC's insights offer valuable perspectives on the state of the market and its implications for various stakeholders.

Malaysia Economic Landscape:

The economic underpinnings of Malaysia have provided a robust foundation for the property market's performance in 2023. According to NAPIC, Malaysia economy is projected to grow moderately, with estimates ranging between 4% to 5% in 2024. This forecast aligns with the positive indicators observed throughout the year, indicating a stable and conducive environment for real estate activities.

Malaysia Property Market Transactions 2023:

NAPIC's comprehensive analysis reveals Malaysia property market in 2023 experienced a remarkable surge in activity throughout 2023, showcasing substantial growth compared to the previous year. Notably, there has been a notable uptick in 2023 property transactions, with both volume and value experiencing significant increases compared to the previous year.

  • Year 2023 Malaysia Property Market Transactions Volume increase 2.5% worth 399,008 Unit.

Year 2023 Malaysia Property Market Transactions Volume increase 2.5% worth 399,008 Unit.

As reported by NAPIC, this increase demonstrates a growing interest in Malaysia property investment and acquisition, indicative of renewed confidence and optimism among buyers and sellers alike.

  • 2023 Malaysia Transaction Value increase 9.9% worth RM196.83 Billion

2023 Malaysia Transaction Value increase 9.9% worth RM196.83 Billion

As reported by NAPIC, this surge in transaction value not only reflects increased market activity but also signifies a strengthening of property prices and asset values. It highlights the attractiveness of real estate as an investment avenue and underscores its enduring appeal as a wealth-building asset class.

 

Malaysia 2023 Property Market Status:

  • 2023 Malaysia Residential New Launches:

    • Residential new launches witnessed a significant increase in sales in 2023, with sold units rising by an impressive 40.4% compared to the previous year. The total number of units launched and sold stood at 56,526 and 54,118, respectively, in 2023 and 2022. This surge in sales indicates a robust demand for residential properties, reflecting positive sentiment and confidence in the market.

 

2023 Malaysia Residential New Launches and Sales Performance

 

  • Residential Overhang & Unsold Units in Malaysia 2023:


    • Encouragingly, the residential overhang and unsold unit inventory experienced a reduction in both volume and value. The volume decreased by 7.0%, accompanied by a 4.0% reduction in value. This decline signifies effective market absorption and alignment of supply with demand, alleviating concerns of oversupply and bolstering market stability.

 

Residential Overhang & Unsold Units in Malaysia 2023

  • Malaysia 2023 Purpose-Built Office Trend:


    • The 2023 occupancy rate for purpose-built offices remained steady at 78.5% in 2022, indicating a consistent level of demand for commercial office space. This stability suggests a balanced market environment, where supply meets the needs of tenants and businesses seeking office premises.

 

Malaysia 2023 Purpose-Built Office Trend:

  • Occupancy and Space Availability In Malaysia 2023:


    • In a positive development, the occupancy rate for commercial spaces increased to 77.4%, reflecting growing demand and utilization of available properties. This uptick signifies improving market dynamics, with more properties being occupied and contributing to economic activity.

Occupancy and Space Availability In Malaysia 2023

2023 Malaysia Economic Overview:

NAPIC's analysis is complemented by broader economic indicators, which point towards a positive outlook for 2024 Malaysia's economy. Declining inflation rates, increased exports, and a decreasing unemployment rate contribute to a favorable economic environment conducive to sustained growth in the property market.

Furthermore, the International Monetary Fund (IMF) forecasts a significant increase in global trade growth, which is expected to further bolster Malaysia's economic prospects and indirectly benefit the real estate sector.  Here's a summary of the significant developments:

  • Inflation Rate:
    • Throughout the third quarter of 2023, the inflation rate exhibited a decline of 2%, followed by a further decrease in the fourth quarter. Notably, the fourth quarter marked the lowest inflation rate recorded in Asia during that period. This trend reflects effective monetary policies and stable price levels, fostering consumer confidence and purchasing power.
  • Global Trade Growth:
    • Encouragingly, the International Monetary Fund (IMF) advocated for an increase in global trade growth, foreseeing a notable uptick from 0.4% in 2023 to 3.3% in 2024. This projection signals a positive outlook for international commerce, driven by improving economic conditions and a resurgence in cross-border transactions.
  • Unemployment Rate:
    • The unemployment rate experienced a significant decline, reaching 3.3% in the fourth quarter of 2023. This reduction signifies a return to pre-COVID-19 crisis levels, underscoring the resilience of the labor market and the effectiveness of employment policies in fostering job creation and economic stability.
  • Exports:
    • Export figures demonstrated robust growth, with exports surging to RM122.4 billion, reflecting an impressive expansion of 8.7%. This increase underscores the competitiveness of the nation's export sector and its ability to capitalize on global demand, contributing positively to economic growth and external trade balances.
  • Investment Prospects:
    • The outlook for investment remained robust, as evidenced by approved investments totaling RM329.5 billion, marking the highest approved investment amount on record. This surge in investment activity underscores confidence in the domestic economy and its long-term growth prospects, fueling optimism among investors and businesses alike.

 

Property Market Outlook for 2024:

Anticipating the challenges and opportunities ahead, NAPIC's report provides insights into the initiatives and policies expected to shape the property market landscape in 2024. Government interventions under Budget 2024 are poised to sustain the momentum in the real estate sector, with a focus on addressing housing needs and revitalizing the market.

These initiatives aim to stimulate demand, facilitate investment, and address key challenges within the sector. Here's a closer look at some of the measures set to shape the property market landscape in the coming year:

  1. Malaysia My Second Home (MM2H) Enhancement:
    • The government intends to ease the requirements of the Malaysia My Second Home (MM2H) program, aiming to attract more tourists and foreign investors to Malaysia. This initiative is expected to bolster demand for residential properties, particularly in the high-end segment, as foreign individuals seek to establish a second home or investment property in the country.
  2. Skim Jaminan Kredit Perumahan (SJKP):
    • To support homeownership and affordability, the government will provide guarantees of up to RM10 billion through the Skim Jaminan Kredit Perumahan (SJKP). This measure is anticipated to benefit 40,000 borrowers, facilitating access to financing for property purchases and stimulating demand in the housing market.
  3. Allocation for Low-Cost Housing:
    • Recognizing the importance of affordable housing, Budget 2024 allocates RM2.47 billion for low-cost houses under various programs, including Program Perumahan Rakyat (PPR) and Rumah Daif. This allocation underscores the government's commitment to addressing housing affordability issues and improving access to decent housing for low-income families.
  4. Revival of Abandoned Projects:
    • In a bid to revitalize the property market and address the issue of abandoned projects, a special guarantee fund of RM1 billion has been earmarked. This fund aims to incentivize reputable developers to undertake the revival of identified abandoned projects, thereby restoring investor confidence and mitigating risks associated with stalled developments.

These targeted interventions reflect the government's proactive stance towards fostering a resilient and sustainable property market. By addressing key challenges, enhancing affordability, and stimulating demand, these initiatives are poised to contribute to the continued growth and vibrancy of Malaysia's property sector in 2024 and beyond.

 

In conclusion, NAPIC's Property Market Report for 2023 provides a comprehensive overview of the Malaysian real estate sector's performance and outlook. Grounded in data-driven analysis and expert insights, the report serves as a valuable resource for industry stakeholders, policymakers, and investors seeking to navigate the opportunities and challenges within the dynamic property market landscape. As Malaysia continues on its path towards economic recovery and growth, the property sector remains a vital engine of prosperity and development for the nation.

Source: National Property Information Centre

 

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Malaysia property market

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Malaysia real estate trends

Malaysia My Second Home (MM2H)

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