PUTRAJAYA (April 30): Malaysia's residential property overhang increased 30.6% in volume to 32,313 units in 2018 compared to 24,738 units in 2017, up 27% in value to RM19.86 billion.

"High rise residential houses formed the bulk of overhang units at 43.4% of the total," said the National Property Information Centre (NAPIC) at the launch of its 2018 Property Market Report today.

The commercial sector also recorded an increase in overhang, which is defined as units unsold nine months after launch. Shop overhang grew by 11.2% in volume to 5,055 units valued at RM4.08 billion.

This was despite a marginal 0.6% increase in total property market transactions to 313,710 transactions with a 0.3% uptick in value to RM140.33 billion.

For residential properties, NAPIC said the number of new launches declined 14.9% to 66,040 units in 2018, while construction activities also slowed by 0.7% in terms of completed units and 8.6% for started units.

NAPIC said Kuala Lumpur showed a significant decrease in new residential launches of 56.1% in 2018, while Johor recorded a 17.3% increase compared to 2017.

This was despite increased transactions, primarily in Kuala Lumpur, Johor and Penang, while Selangor reported a decline in transactions in 2018.

House prices continued to climb in 2018, with the Malaysian House Price Index rising 3.1 points against 2017, led by higher prices in Johor and Selangor.

In the commercial property sector, there was an increase of 8% in the volume of transactions and 16% in value, rising to 23,936 units for a value of RM29.51 billion.

NAPIC said the property overhang issue needs to be thoroughly handled with holistic measures.

"Overhang does not mean oversupplied. There are other contributing factors such as mismatch, affordability and costs of living," it said.