According to the 2000 property Market Report, which is prepared by Valuation and Property Services Department of Ministry of Finance and was launched by Deputy Finance Minister Datuk Chan Kong Choy, the local property market is expected to stay mixed throughout this year. The performance for office and retail is likely to remain sluggish in the medium term.

The less favourable outlook for office and retail space reflected a market where buyers and tenants would continue to enjoy the upper hand in the face of the vendors' and landlords' weak bargaining position. According to the report, there is a significant amount of new office and retail space now under construction.

The residential properties are expected to enjoy sustained demand under the current low cost of funds and high mortgage liquidity regime, provided that household disposable incomes continue to improve.

The demand of property would continue to focus on the units priced below RM200,000. For high-rise type of property, priced below RM100,000 would continue to be good for some time. Price for residential property is expected to trend up further, but it is not likely to reach the rate of 14.3% average annual increase projected by the Malaysian House Price Index.

The overall property transactions for year 2000 were improved moderately at 6.3% and 20% for total volume and total value respectively compared to previous year's 21.4% and 23.3% improvement.

In all, the 2000 activity was still some way off the height achieved in pre-crisis era (1997) with 12.6% and 22.3% shartfalls of total value and total volume. Only residential sector was close to the 1997 level.

There was RM9.84 billion of properties in residential and industrial sector at the second half of year 2000, 11.6% higher than in the previous six months. The value of vacant space in purpose-built offices and shopping complexes was RM18.58 billion at the end of year 2000.

The number of unsold residential units was 51,348 compared to 45,705 at the end of June 2000. The total value increased to RM6.6 billion, 5.6% higher than previous six months. Terrace houses occupied the highest number of unsold units with 20,743 units and condominium/apartments with 8,676 units. Johor (12,550 units) and Negri Sembilan (12,379 units) made up almost half of the unsold residential property and 52% in total value.

In commercial sector, the number of unsold units also went up to 7,507 units (RM2.11bil) from 5,989 units (RM1.91bil). Again, Johor has the highest number of unsold commercial properties at 2,274 units, followed by Negri Sembilan at 1,123 units and Selangor at 968 units.

Total Space available for purpose-built offices rose to 11.78 million sq m (1.2%) in the last quarter compared to third quarter of 2000.

Kuala Lumpur and Selangor had the largest purpose-built office space available, occupying 48.8% and 16.2% of total stock. On the other hand, Terengganu, Kelantan, Malacca and Perlis recorded highest occupancy rates of 93.36% to 97.87%. The lowest rates were in Johor, Sabah, Penang and Selangor within 66.13% to 76.76%.

The total office space completed increased 53,348 sq m from the third quarter and Putrajaya had the largest supply with 7 out of 8 completed buildings.

Total space in shopping complexes rose 1% to 5.56 million sq m in the fourth quarter while the occupancy rate increased 1.3%. Kuala Lumpur and Johor accounted 93.2% of the total planned supply of retail space in complexes.