KUALA LUMPUR (May 15): The increase in the overnight policy rate (OPR) to 3% on May 3 is expected to have an impact on property market activity, particularly residential demand, said the National Property Information Centre (Napic).
Napic, which is under the Ministry of Finance’s valuation and property services department, said on Monday (May 15) that residential market activity in the first quarter of 2023 (1Q2023) already saw a decline, partly due to the gradual increase of OPR to 2.75% in November 2022.
Overall property market transactions fell 5.7% year-on-year (y-o-y) to 89,000 in 1Q2023, Napic said.
Nonetheless, it pointed out that the number of transactions was higher than in pre-pandemic years.
Concurrently, total transaction value in the period rose 0.8% y-o-y to RM42.31 billion.
The decrease in activity in the residential property subsector at a rate of 6.6% and agricultural property subsector at 12.5% compared to 1Q2022 affected the performance of the overall property market, Napic said in a press statement.
Nevertheless, the increased activity in the commercial and development land subsectors offset the overall decline, it added. Activity in the commercial land subsector rose by 14.5% in volume and 22.1% in value while the development land subsector saw an increase of 2.8% in volume and 30.4% in value.
Napic said the residential subsector continued to support the overall property market activity with 60.5% share, recording nearly 54,000 transactions worth RM20.87 billion.
It said residential property in the price range of RM300,000 and below recorded 29,560 transactions (54.8%), followed by RM300,001 to RM500,000 with 13,325 transactions (24.7%) and RM500,001 and above with 11,038 transactions (20.5%).
“Seasonal factor in house purchases which is usually low at the beginning of the year, the increase in the OPR and the Consumer Sentiment Index (CSI) decline (1Q2023: 99.2 points versus 1Q2022: 108.9 points) were among the factors that contributed to the decline in residential market activity in particular,” it said.