KUALA LUMPUR: Property transactions dropped in the first nine months of last year, said the Valuation and Property Services Department, confirming observations by real estate professionals that the market is slowing down.
Although the number of transactions was lower, there was an upward trajectory in value, an indication of rising prices.
The department’s deputy director-general Faizan Abdul Rahman said the residential sub-sector, which accounted for about 64% of the total property transactions, saw a 14% drop from a year earlier, with average house prices exceeding RM300,000.
Faizan was speaking at the 7th Malaysian Property Summit 2014 organised by theAssociation of Valuers, Property Managers, Estate Agents and Property Consultantsyesterday.
Faizan said the commercial sub-sector saw a drop of 22.3%, compared with the previous year.
The industrial, agricultural and development sub-sectors saw reductions of about 20%, 13.6% and 8.3%, respectively.
The total number of transactions for the first nine months fell to 280,820 valued at almost RM106bil, compared with 328,692 in 2012 worth RM107bil.
Transactions in 2010 surpassed the RM100bil mark as a result of an extremely buoyant market, which started in 2009. It has been on an upward trajectory since then.
On the effect of the various tightening measures, organising chairman Choy Yue Kwong said they would curb excessive speculation.
Choy, who is Rahim and Co (Selangor) Sdn Bhd managing director, said the measures would discourage speculators from using bank loans to finance their purchases.
“The curbs are slowly taking effect. The measures will have a significant impact on speculation, especially speculators who depend on bank loans,” he said.
Choy added that the real property gains tax (RPGT), however, will have little effect on curbing speculative activities in the market.
He said the RPGT should have been introduced earlier when house prices were lowerand prices had appreciated faster, resulting in higher profit margins.
Prices had skyrocketed now, squeezing profit margins and rendering the RPGT less effective, he added.
CH Williams Talhar & Wong Sdn Bhd managing director Foo Gee Jen, meanwhile, said there was a mismatch between the demand for real estate and supply.
“There is an oversupply of high-end residential property in the market. Prices have gone up too much over the last few years. What people really need is affordably priced lower-to-mid-range housing,” said Foo.
“Developers will be pressured to cater to this market segment that is most in need. Having said that, the bright side is that the market is expected to stabilise with more realistic prices over the year.”