The report also indicated that the overall property market transaction value has declined by 8% to RM149.9 billion in 2015 from RM162.9 billion in 2014.
This was the first decline in transaction value in six years as the last decline noticed was in the year 2009 when transaction value declined 8.3%.
In conjunction with the release of the report today, Deputy Finance Minister Datuk Chua Tee Yong told reporters that the soft property market scenario is expected to continue in 2016.
"Residential sub-sector remain the strength in the property market (in 2015) and capable to drive the industry due to emphasis given by the 11th Malaysia Plan and Budget 2016," he said.
Residential sub-sector continued to lead overall property market in 2015, constituted 65.2% of total transacted volume, followed by agricultural (18.4%), commercial (8.8%), development land (5.7%), and industrial (1.9%).
The residential sub-sector transacted volume dropped 4.6% in 2015, while all of the other sub-sectors also fell in the range of 2.4% to 13%.
In terms of value, except for agricultural and development land, which posted growth of 2.9% and 14.9% respectively, all other sub-sectors recorded declines in the range of 10.5% to 17.6%.
Chua pointed out that the Malaysian Housing Price Index (MHPI) had moderated as at the fourth quarter of 2015, registering 227.5 points (at base year 2000), up by 5.8% on an annual basis, which is significantly lower than the 5-year average growth of 9.6%.
Among the key states, the slowest on-year growth was recorded in Johor (+5.6%) and Penang (+5.8%).
"This is the first time since 2011 that the index saw a decline of 0.8% on a quarter-on-quarter basis, resulted from various cooling measures to contain housing prices," he added.
Kuala Lumpur HPI growth was better at +6.4% year-on-year followed by Selangor’s +6.2% year-on-year.
“We believe that the outlook for property price is better in Greater Kuala Lumpur (Klang Valley: Selangor and KL) due to the support from urbanisation factor. On a quarterly sequential basis, HPI declined for the first time since the fourth quarter in 2008,” Chua said.
Chua also said that the increase in offerings through housing programmes announced in Budget 2015 and 2016 is expected to inject more affordable housing for Malaysian citizens with moderate income.
"Overall new launches are expected to be slow (in 2016), allowing the property market to absorb completed unsold units from time to time," he said.
"In view of more than 50% of new launches in 2015 [falling] under the price range of RM500,000 and below, 2016 market pattern is expected to continue (to) be dominated by affordable housing," he added.
Meanwhile, he also foresees that the performance for office market is estimated to be flat in 2016 followed by additional new spaces to be added into the market.
"Pressure will be expected to continue on office space rental, especially buildings with tenants related to the oil and gas industry," he explained.
Nevertheless, he stressed that various incentives and activities in building infrastructure and public transport network will help to support the long-term growth of the property sector.
Latest Bank Negara statistics show that “Applied Loan for Purchase of Property” fell 4% year-on-year in February 2016 to RM17.83 billion. Although this is a slight improvement from the 12% drop in January 2015, it is still lower on-year.
On a monthly basis, the data was 18% lower due to seasonally lesser property loan in February in view of festival celebrations.
Kuala Lumpur-based research house MIDF Research opines that consumer appetite on big ticket items such as property and car remains low due to record high household debt coupled with elevated cost of living.
The latest publication from Malaysian Institute of Economic Research (MIER) shows that the Consumer Sentiment Index (CSI) is at all-time low of 63.8 as at the fourth quarter of 2015, significantly lower than the aftermath years of the 2007-2008 Global Financial Crisis.
As a relative comparison, consumer confidence in Malaysia averaged 103.32 from 2005 until 2015, reaching an all time high of 124.10 in the first quarter of 2007.
Caroline Russell, CEO of Malaysia's homegrown tea maker Boh Plantations, told CNBC in an interview with "Managing Asia" in October last year: "Malaysians are beginning to feel the pinch after what has been a difficult year for Malaysians, especially with the introduction of the goods and services tax (GST) in April."
Russell was referring to the implementation of the 6% GST in April last year, with the aim of reducing the country's budget deficit.
MIDF Research believes consumers are likely to continue deferring big item purchases in the near term.