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PETALING JAYA: The Malaysian property market saw a 6.2% decline in transactions in the first quarter of the year, with 97,772 deals recorded, valued at RM51.42 billion – down from 104,297 transactions worth RM56.53 billion in Q1 2024.

Valuation and property services department director-general Abdul Razak Yusak said that in terms of volume, the residential sub-sector continued to dominate market activities with over 59,000 transactions, valued at over RM24 billion.

The industry sub-sector grew by 0.3% compared to Q1 2024, while the agriculture and commercial subsectors dropped by 10.6% and 5.4%, respectively.

However, Razak said construction activities grew positively in Q1 2025, with 28,344 properties beginning construction, up from 21,391 in the same period last year.

Construction activities for the serviced apartment segment saw a 100% spike, rising from 5,458 in Q1 2024 to 14,761 in Q1 2025.

New residential launches also increased by over 100% to 12,498 units from 5,585 in Q1 2024.

The Malaysian house price index rose marginally by 0.9% to 225.3 points, with house prices averaging RM486,070 per unit.

“All states recorded a moderate increase in house prices of between 0.3% and 6.9%, except for Sabah, Sarawak and Kuala Lumpur, where prices dropped 2.4%,” Razak said when unveiling the Q1 2025 Real Estate Market Report today.

Completed unsold housing, commonly known as residential overhang, increased to 23,515 units valued at RM15 billion from 23,149 units worth RM13.94 billion in the fourth quarter of 2024.

Serviced apartment overhang dropped by 6.7% to 18,246 units, with a 6.9% decrease in ringgit value to RM14.61 billion.

Razak said government initiatives such as the introduction of the Forest City special financial zone in Johor, the Johor-Singapore special economic zone, and Pulau Satu as a duty-free island had boosted the serviced apartment market in the state.

“The overhang rate for serviced apartments in Johor dropped to 5.6% in the first quarter of 2025 compared to the fourth quarter of 2024,” he said.