KUALA LUMPUR: The property market outlook this year is expected to stay competitive and chart steady growth, said Deputy Finance Minister II Datuk Kong Cho Ha.

“Although the property market may be affected by inflation and rising costs, the government is taking measures to monitor the country’s economic development closely and come out with more workable policies to ensure investors continue to come in,” he said.

The waiver of the real property gains tax (RPGT) which took effect from April last year, acted as a catalyst for the property market activity.

Between May and December 2007, the number and value of secondary residential transactions increased by 8.5% and 30.8% repectively to 99,679 transactions worth some RM19.29 billion from the corresponding period in 2006.

Last year’s property market recorded transactions worth RM77.14 billion, translating to 309,455 transactions. Transaction volume and value grew by 9% and 25.2% repectively against 2006 with the residential sub-sector remaining the most dominant with 64.5% of the total volume and 47.3% of the total transaction value.

Kong said that the fiscal policies introduced last year to help boost the property market like the RPGT waiver, liberalisation by the Foreign Investment Committee (FIC) on foreign purchasers and 50% stamp duty exemption are currently under review by the government.

“The government may come up with new solutions to further stimulate the sector,” Kong told reporters at a press conferece after the launching of the National Property Information Centre’s 2007 Property Market Report.

According to the report, the overhang rate for residential units in the country went down for the first time since 2002 to record 23,866 units comprising mainly double — to 3-storey terraces and condominiums/apartments.

It was a reduction of 6.9% against 2006’s overhang rate of 25,645 units. About 61.7% of the overhang units were priced below RM150,000. Overhang values fell by 8.8% to RM3.82 billion against RM4.18 billion recorded in 2006.

Johor recorded the highest number of overhang units at 6,941 units, followed by Selangor and Sabah at 4,053 and 2,447 units respectively.

Prices of homes were largely mixed with preferred or choice locations in the various states recording increases. The Malaysian All House Price Index rose 4.8% to 124.0 points last year while the average price of all houses went up 2.2% from RM170,158 in 2006 to RM173,998 last year. Kuala Lumpur and Selangor had the highest price level in the country at RM393,211 and RM253,225 respectively.

Commercial properties, especially the office and shopping complex sub-sectors, remained resilient in 2007 following positive business sentiments. The overall occupancy rate for purpose-built office continued on an uptrend after three consecutive years to record 85% while the occupancy rate for shopping complexes remained at 80.4% last year.

In most states, prices and rentals for shops were largely stable with increases recorded in selected locations. Ground floor shops in popular areas in Kuala Lumpur like Jalan Tuanku Abdul Rahman and Jalan Masjid India had the highest monthly rental values of between RM20,000 and RM25,000.