PETALING JAYA, May 9 – The Malaysian property market experienced a noticeable slowdown in the first quarter of 2025, with transaction volumes and overall value declining. According to recent data, a total of 97,772 property transactions were recorded, amounting to RM51.42 billion – representing a 6.2% decrease in transaction volume and an 8.9% drop in value compared to the same period last year. This trend coincides with a concerning rise in the number of unsold residential properties across the nation.

Key Concerns: Rising Unsold Inventory

The decline in transactions is particularly concerning when viewed alongside the increasing inventory of unsold properties. Analysts suggest several factors are contributing to this situation, including tighter lending conditions, affordability challenges for potential homebuyers, and an oversupply of certain types of properties, particularly high-end condominiums in urban areas. The National Property Information Centre (NAPIC) will be releasing a more detailed report later this month, expected to provide a deeper dive into the specific segments of the market most affected.

Transaction Breakdown & Value Shifts

While the overall transaction value decreased, a closer look reveals varying performance across different property types. Residential properties continued to dominate the market, accounting for the largest share of transactions. However, the value of residential properties transacted also saw a decline. Commercial properties also experienced a decrease in transactions and value, suggesting a broader cooling trend across the entire property sector.

Expert Analysis & Future Outlook

Property experts attribute the current market conditions to a combination of macroeconomic factors, including rising interest rates and inflation. “The recent adjustments to Overnight Policy Rate (OPR) by Bank Negara Malaysia have made it more expensive for individuals to borrow money, impacting their purchasing power,” explained a real estate analyst. “Furthermore, the ongoing global economic uncertainty is also contributing to a cautious sentiment among both buyers and investors.”

Looking ahead, the outlook for the Malaysian property market remains cautiously optimistic. While a further correction in prices is possible, particularly in the oversupplied segments, the long-term fundamentals of the market remain strong. Government initiatives aimed at stimulating homeownership, such as stamp duty exemptions and affordable housing schemes, could help to support demand. However, developers will need to adapt to the changing market dynamics by focusing on building properties that meet the needs and affordability of potential buyers.

Key Takeaways for Buyers and Investors:

• Negotiating Power: Buyers may find themselves in a stronger negotiating position as the market cools.
• Due Diligence: Thoroughly research the location, property type, and developer before making any investment.
• Long-Term Perspective: Real estate remains a long-term investment, and short-term market fluctuations should not deter those with a long-term perspective.

The coming months will be crucial in determining the trajectory of the Malaysian property market. Monitoring NAPIC's full report and keeping abreast of economic developments will be essential for both buyers and investors.