PETALING JAYA: The Melaka property market recorded a 5.5% and 4.6% increase in volume and value respectively last year, according to the National Property Information Centre's (Napic) 'Property Market Report 2014'.

The residential property segment was the best performing, recording an increase of 10.4% and 25.7% in volume and value respectively.

The report stated that prices of residential property were generally stable, with mixed movements noted in several locations. Single-storey terraced units fetched between RM110,000 and RM170,000, while some units in selected neighbourhoods of Melaka Tengah fetched more than RM200,000.

The residential rental market was generally stable. Rental of single-storey terraced units in Melaka Town fetched between RM350 and RM550 per month while similar units in Taman Merdeka and Melaka Tengah recorded a 22.1% rental increase due to their proximity to industrial areas.

Branch manager and valuer of Rahim & Co Chartered Surveyors (Malacca) Sdn Bhd Khairul Nizam Othman said demand for affordable residential properties below RM200,000 was strong and is expected to continue because demand now exceeds supply.

He says the Goods and Services Tax (GST) will affect the performance of commercial segment this year but that it is still an attractive longer-term investment. 

'First, there is no significant shortage in commercial property supply. Second, commercial property is subject to GST. I anticipate a slowdown in in the performance of the commercial property segment this year. [However], Melaka is a well-known tourist destination, so commercial property demand is definitely there, but location is key.'