There were more condominium and terraced house purchases in 2022, said Juwai IQI co-founder and group chief executive officer Kashif Ansari.
According to him, the residential market made a decisive stride towards post-pandemic recovery last year.
He said one of the encouraging patterns the firm noticed in 2022 was an increase in activity, with a higher volume and value of transactions that year than in 2021.
Buyers completed 243,190 transactions worth RM94.28 billion, up by 22.3 per cent in volume and 22.6 per cent in value year-on-year.
Kashif said the increase in residential transactions showed that there was a high demand for houses.
"The market continues to emphasise condominiums and terraced houses. Condominium/apartment units dominated the new launches, capturing 45 per cent of the total, followed by terraced houses at 42.2 per cent. While it is difficult to forecast such a dynamic market, we do have a base case. We believe the reduction in the residential overhang and the growth of new project launches and transactions in 2022 suggest sentiment and conditions are improving," he said.
Kashif said the reduction in the residential overhang is a robust and positive sign.
The overhang fell by 24.7 per cent in volume and 19.2 per cent in value to 27,746 units worth RM18.41 billion as at Q4 2022.
"Overhang properties can put downward pressure on real estate prices and transaction activity. As the market absorbs this unsold supply, we can better balance supply and demand. That supports price growth and further growth increase in transaction activity," he said.
Kashif said new launches performed moderately well in 2022, with more than 54,000 units launched, and approximately 36 per cent of these finding buyers.
WP Kuala Lumpur is the best-performing market for new launches, with 47 per cent of new are sold. In Johor, 43 per cent of new units weres old, and in Selangor, 27 per cent.
"In summary, the residential real estate market shows signs of growth, especially in the residential and commercial property segments. However, buyers remain cautious and external factors such as the ongoing pandemic, economic performance, and government policies could impact the market. We will continue to issue updated forecasts and reports as 2023 progresses," he said.
Kashif said looking forward over the next 12 months, the firm is taking a cautious approach to predicting price changes.
He believes the Malaysian House Price Index (MHPI) could climb in 2023 by three per cent to seven per cent.
"Growth of five per cent is our base case," he said.
The MHPI grew 2.8 per cent in 2022. Terraced house prices climbed by 3.7 per cent, followed by high-rise prices at 3.4 per cent, and semi-detached homes at 2.9 per cent. Detached house prices recorded a slight decline of 2.9 per cent.
"While the House Price Index in WP Kuala Lumpur was down marginally by 0.2 per cent, other major states saw positive growth. Selangor, Johor, and Pulau Pinang were up by 3.4 per cent, 2.2 per cent, and 3.2 per cent, respectively. We expect the demand for affordable housing to remain strong, which could drive transaction activity in the sub-RM300,000 price range through the first quarter of 2024," he said.