In a bid to develop a more robust residential rental market, Malaysia is looking at establishing a property rental law that would protect both the tenants and the landlords.
“We don’t have one (rental law). It’s important to have rental law. The rental markets in the developed countries are robust. In Malaysia, only 24 percent of households rent,” said Second Finance Minister Datuk Seri Johari Abdul Ghani at the sideline of the 20th National Housing & Property Summit 2017.
“Society has to correct the stigma – renting is not the last resort, it is simply a choice.”
Under the new law, the government may set up a tribunal where landlords and tenants may resolve their disputes.
“We need to have proper regulations so that it’s cheaper for people to refer their disputes. Today, if you go to the courts, legal costs are heavy. This is a ‘package’ that we need to bring forward to improve our property market,” he said.
He noted that Malaysia’s commercial property and residential markets are undergoing a disproportion, with some segments experiencing a glut.
In fact, median house prices are currently beyond the reach of most Malaysians, primarily due to a gross mismatch between supply and demand amid differing expectations between developers and households.
“The distribution of new housing supply has been concentrated in the higher-priced categories (RM250,000 and above). It is estimated that 80 percent of new launches in the first quarter of this year were for units priced above RM250,000,” he revealed.
The oversupply of high-end properties resulted to a significant portion of such properties remaining unsold, of which 83 percent are priced above RM250,000.
Meanwhile, the vacant office space in Malaysia stood at 18 percent and 32 percent in the Klang Valley. Vacant shopping mall space for Q1 2017 stood at 36 percent in Penang, 24.4 percent in Johor and 13.4 percent in the Klang Valley.
“The oversupply is huge. We need to manage this,” said Johari.
Image sourced from Kinibiz.
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