KUALA LUMPUR (March 30): The number of unsold houses remained elevated in the third quarter of 2021 despite some improvements in activity in the residential property market, said Bank Negara Malaysia (BNM). 

A total of 180,702 units remained unsold in the third quarter of 2021, compared with 181,463 in the second quarter, BNM noted in its Financial Stability Review for the second half of 2021.

The central bank said disruptions caused by the pandemic partly contributed to slower clearance of unsold housing stocks despite ongoing home purchase incentives. 

“More broadly, the elevated number of unsold houses reflects pre-existing affordability issues in the housing market, which has worsened since the onset of the pandemic as consumer incomes were affected.

“In this regard, supply adjustments continued with more new housing launches shifting towards lower- and mid-price market segments,” BNM said. 

Noting that the share of property launches priced at RM500,000 and below increased significantly in the third quarter, BNM said this should help to cap a further significant increase in unsold housing stocks. 

Meanwhile, the central bank said there was a significant increase in loan applications in the final two months of 2021, which coincided with the Home Ownership Campaign that ended on Dec 31.

Improving employment prospects and a low-interest rate environment further spurred demand in housing, it added. 

“Demand for housing was largely driven by owner-occupiers, with 57.3% of approved housing loans in the second half of 2021 granted to owner-occupiers.

“While the transaction volume increased marginally in the third quarter of 2021, it remained below the quarterly average volume of transactions recorded in recent periods.

“However, market activity is expected to have improved in the fourth quarter of 2021, driven by resumption of economic activities,” said BNM.

Read more stories from the BNM Annual Report 2021 here.