The property market recorded 320,000 transactions, worth RM145.41 billion, in 2016, a decline of 11.5 per cent, against the previous year.

In a statement today, the Valuation and Property Services Department said the residential sub-sector continued to drive the overall market with a 63.4 per cent contribution in volume and 45.1 per cent in value while affordable houses continued to be in demand with more than 65.0 per cent of the residential transactions recorded for properties costing within RM300,000 and below.

As the market continued to soften, the number of newly launched houses declined to nearly 53,000 units, down by 9.8 per cent, compared with more than 58,000 units in 2015, it added.

Meanwhile, sales performance was also lower at 31.4 per cent compared with 42.1 per cent in 2015.

The slow market absorption also led to an increase in the overhang,the statement said, adding that the numbers grew to 14,792 units, worth RM8.56 billion, up 43.8 per cent, in volume and 70.7 per cent in value against 2015.

"I must emphasise that this is a pertinent issue that must be addressed by all parties, particularly the local authorities and property developers.

Both must exercise due diligence before arriving at a development decision to avoid an oversupply situation," Director-General Dr Rahah Ismail was quoted as saying in the statement.

In the office and retail sector, vacancies continued to increase with both Kuala Lumpur and Selangor recording 2.74 million square metres of vacant office space, an increase of 16 per cent, compared with 2015.

Vacant retail space also increased to 2.7 million square metres, up 11.9 per cent, against 2015.

On outlook, Rahah said the property market would remain soft in the next two years, supported by the various property-related incentives and accommodative monetary policy.