Bank Negara has characterised Malaysia's property market as one with an oversupply of non-affordable homes and idle commercial space.

In the central bank's quarterly bulletin yesterday, the report also indicated that Malaysia had an undersupply of affordable homes.

"This situation could worsen if the current supply-demand conditions persist. Within the country, Johor is poised to have the largest property market imbalances (highest number of unsold residential properties and potentially the largest excess supply of retail space).

"As such, it is timely for all parties to act now to mitigate any potential risks to macroeconomic and financial stability," said Bank Negara.

The number of unsold residential properties is currently at decade-high, primarily due to a mismatch between new housing launches and what households can afford to pay, the bank added...