Speaking to StarBiz, the deputy president of the Malaysian Institute of Estate Agents said asking prices are generally too high and many buyers are showing caution as a result.
"The buying frenzy is over," Mr Shanker told the newspaper.
"In 2010 and 2011, some residential sectors saw an increase of about 30 per cent, which is way too high and moving towards a bubble."
He added that some recent transactions have fallen through due to discrepancies between the asking price of the property and the actual figure given on the valuation report.
Mr Shanker said he believes house prices will "stagnate a bit and not move up so much" in 2013, although there will be no major crash in the Malaysian property market.
In August, data from Bank Negara showed the rate of loan approvals for residential property purchases in the country declined to 46.8 per cent in the first half of 2012, down from 50.1 per cent during the same period last year.