It looks like the local property market is still not out of the woods, just yet.

According Bank Negara Malaysia’s (BNM) financial stability review for 1H2018: “Imbalances observed in the property market continue to persist.”

“The number of unsold housing units, correspondingly increased to about 146,196 units as at end of first quarter of 2018, with more than 80% of unsold units priced above RM250,000,” said BNM.

The central bank, however, also mentioned that there is still demand out there for affordable homes.

“Nevertheless, sustained demand for affordable housing, particularly from first-time homebuyers and prudent underwriting practice in lending to the property market and related sectors are expected to mitigate risks of a broad based price correction.”

In February, BNM commented in its quarterly bulletin that the country faced a shortage of affordable houses for the masses.

The central bank also revealed back then that data showed homes in the country were “seriously unaffordable” in 2016 compared to global standards.

Meanwhile, BNM said that “Risks from household sector exposures continue to be mitigated by prudent underwriting and loan affordability assessments by financial institutions and sound risk management practices.

“New household borrowings remained of high quality.”

It said that about 75% of fresh loans were approved to “borrowers with debt service ratios (DSR) of less than 60%.”

“Overall household debt accumulation has also been on a more sustainable path relative to income growth, as a result of the cross-cutting measures that have been implemented since 2010.

“The ratio of household debt-to-GDP continued to moderate and currently stands at 83.8% in the 2Q 2018 (2017: 84.2%).”

As for the commercial segment, things are not so rosy.

“Excess supply of office space and shopping complexes is also expected to persist as vacancy rates deteriorated further in the first quarter of 2018.”

Source: EdgeProp.my