Average residential property prices jump more than 30% in KL, Johor, Penang

KAJANG: Average residential property prices transacted in Kuala Lumpur, Penang and Johor jumped more than 30% in 2013, as the number of transactions done fell, except in Johor.
The property price boom that Johor has been seeing thanks largely to the Iskandar development region, translated to a 39.92% increase in average value of residential transactions in 2013 to RM275,854 from RM197,147 in 2012.
The data was released in the Property Market Report 2013 issued by the Valuation and Property Services Department (JPPH) yesterday.
In Kuala Lumpur, the average value of residential properties rose 37.66% to RM673,249 in 2013 from RM489,052 in 2012 while Penang posted a 31.45% increase to RM400,738 in 2013, from RM304,858 in 2012.
In Selangor, the average value of residential properties rose 19.91% to RM405,895 in 2013 from RM338,508 in 2012.
Overall, the Malaysian property market recorded moderate growth which saw a contraction of 10.9% in volume but with a marginal increase of 6.7% in value. The year registered 381,130 transactions worth RM152.37 billion against 2012 which recorded 427,520 transactions and RM142.84 billion in value.
"The residential sub-sector retained the lion's share in the property market, contributing 64.6% share in volume and 47.3% in value. The year registered 246,225 residential property transactions worth RM72.06 billion which reflects a contraction of 9.7% in transactions and increase of 6.3% in value against 2012," said Deputy Finance Minister Datuk Ahmad Maslan at the launch of the report.
Prices of houses continued to increase with the All House Price Index increasing to 192.9 points last year from 172.8 points in 2012.
In terms of volume, most states recorded a downturn in transactions except Johor which recorded growth of 16.6%. Kuala Lumpur, Penang and Selangor recorded 34.4%, 23.9% and 14.3% decline respectively.
In terms of value, Johor recorded the highest growth of 63.2% while Selangor recorded a small growth of 2.8%. In Kuala Lumpur, residential property values contracted 9.7% while Penang showed no growth.
According to Ahmad Maslan, the prevailing low interest rate environment continued to support the domestic property market with the base lending rate of commercial banks sustaining at 6.53% and a weighted average lending rate at 5.4%.
Housing approvals reduced substantially by 22.5% last year compared with a 47.4% expansion in 2012. Total loans disbursed for purchase of residential properties however, increased to RM74.4 billion from RM64.1 billion in 2012.
"This year, house prices will continue to increase but not drastically while the number of transactions may be stable," he said, adding that the Goods and Services Tax (GST) which will be implemented in April next year may result in a slight increase in house prices.
"When GST is implemented next year, we don't see house prices increasing too much because the buying, selling and renting of residential properties are not taxed," he said.
The Real Estate and Housing Developers' Association Malaysia (Rehda) had previously warned that house prices may increase despite the residential sub-sector not being taxed, due to tax on some building materials that cannot be claimed and may be passed on to consumers.
However, Ahmad Maslan said the increase should not be too much, at a maximum of 1.8% when GST is implemented.
"The 10% sales tax on building materials previously were also not claimable, yet house prices still increased. In fact, the tax will be (reduced to) 6%. This should not be an excuse to raise house prices," he added.