The latest data by the National Property Information Centre (Napic) shows that the volume and value of transactions grew 3.1 per cent and 0.3 per cent respectively compared to 108,933 transactions worth RM57.14 billion in the same quarter last year.
Industry specialists are bullish about the prospect for the rest of the year.
CCO & Associates (KL) Sdn Bhd executive director Chan Wai Seen said it is still the buyers' market and hence, the time is ideal to buy a house.
Key driving factors of the market performance are sustainable economic growth, strong banking system and positive demographic trend.
"A large proportion of the Malaysians fall under young population and has yet to own a house," Chan told Business Times.
In addition, many youngsters are moving out from their parent's house, hence, creating demand for houses, in line with the reduction in average household size.
Chan said properties priced between RM300,000 and RM500,000 fall within affordable range for most Malaysians, especially for first time and young house buyers.
This is also in line with the stamp duty exemption for properties priced at RM500,000 and below.
The discontinuation of 75 per cent stamp duty exemption for properties above RM500,000 to RM1 million, has diverted the demand to properties priced at RM500,000 and below.
Chan said the increase in minimum wages to RM1,700 and wages increase for civil servants will push the spending power of Malaysians.
"Employment will also increase in line with the increase in fireign direct investment. The worsening geopolitical tensions in Ukraine as well as Middle East may cause global economic slowdown/recession, including Malaysia.
"Any impact of Donald Trump's administration will not be direct on Malaysia's property market," he added.
Based on the Napic data, residential holds large part of the Q3 volume with 62.8 per cent or 70,520 units worth RM28.74 billion and more than 64,000 units sold are priced below RM300,000.
Southern region comprising Johor, Melaka and Negri Sembilan led the volume of transactions by 26.2 per cent, or 29,415 units.
Although unsold properties remain an issue in Kuala Lumpur, Johor and Perak, residential overhang dropped 3.0 per cent to 21,968 units from 22,642 units in the second quarter (2Q) of 2024.
Most of the unsold properties are residential priced between RM300,000 and RM500,000 whereby 7,003 units valued at RM2.78 billion are unsold.
Perak saw a significant downtrend in its unsold properties, having fallen 27 per cent to 3,039 units from 4,161 units in the previous quarter.
Meanwhile, unsold properties in Johor stood at 3,030 units in Q3, down 6.0 per cent from 3,219 units in 2Q.
Conversely, overhang in Kuala Lumpur rose 7.0 per cent to 3,273 units from 3,051 units.
Universiti Teknologi Malaysia associate professor in property economics and finance Dr Muhammad Najib Razali said house prices had been increasing in recent years due to various factors such as rising construction costs due to higher material prices and labor shortages.
Additionally, land scarcity in prime urban locations has made properties in these areas more expensive while demand for better-quality housing and modern amenities has pushed developers to offer higher-end products.
"These factors, along with inflation and economic recovery post-pandemic, continue to influence the upward trend in house prices. Balancing these affordability and pricing pressures is critical for buyers when making purchasing decisions."
He said the property market is expected to continue its recovery trajectory, supported by steady economic growth and increasing construction activity.
