The overall property market performance is expected to remain lacklustre going into 1H2018, continuing from the weak conditions in the second half of last year, says Knight Frank Malaysia.

In its report entitled, "Real estate highlights for the second half of 2017” released on Monday, it said the property market remained weak during that period due to the oversupplied position in the main sub-sectors such as high-end residential, office and retail.

"Amid flagging demand ahead of the upcoming general election, overall market performance is expected to remain lacklustre going into 1H2018" its managing director Sarkunan Subramaniam attributed said.

The report looks into the market performance of the various property mix. They are residential, office and retail. It also highlights the trends and outlook in key markets of Malaysia, namely Kuala Lumpur, Klang Valley, Penang, Johor Bahru and Kota Kinabalu.

The weak conditions in 2H2017 were due to an oversupplied position in the main sub-sectors such as high-end residential, office and retail.

The report said developers were shifting their focus to the middle-income and affordable housing segments to cater to a wider target catchment amid challenges in the high-end market.

As for the tenant-favoured office market, there were mounting pressures on occupancy and rental levels as the increasing high supply pipeline continue to overshadow low absorption.

Meanwhile, despite the current challenges in the retail industry, the mid to longer term prospect remains positive as more retailers embrace the concept of "clicks and mortar'” amid the e-commerce boom while owners and mall operators continue to undertake asset enhancement initiatives to reposition their assets in the changing retail landscape. "While the recent property freeze may provide a breather to the oversupplied markets, it is not expected to correct the oversupply situation in the short to medium term. The property market will continue to self-correct as it looks to find its equilibrium" he pointed out.