The volume of unsold completed houses in Malaysia grew by 48.35 percent from 20,304 units a year ago to 30,115 units as of 30 September 2018, based on the latest data from the Valuation and Property Services Department (JPPH).
In a report by The Star, JPPH revealed that the overall value of overhang residential properties surged by 56.44 percent from RM12.49 billion to RM19.54 billion over the same period. If serviced apartments and small offices home offices (SoHos) are included, the figure rises to 40,916 units collectively worth RM27.38 billion.
Notably, JPPH defines unsold completed homes as those that have been finished and obtained regulatory approval for occupation, but have not been sold nine months after being released for sale.
By category, the largest concentration of overhang residential properties cost RM500,000 and above as there over 12,000 of such units. In comparison, there are around 3,500 units of unsold houses priced from RM200,000 to RM250,000.
To address the large volume of overhang residential properties, the federal government and members of the Real Estate Housing Developers Association (REHDA) are making preparations to roll-out a national home ownership campaign in January 2019.
Home builders that are anticipated to launch promos to entice people to buy houses next year include established property players such as Mah Sing, Sunway and Eco World Development Group.
Notably, the volume of unsold completed houses in terms of number and total value has been rising over the last few years. This is except for 2015, when the overhang fell to 8,804 units with combined value of RM3.64 billion. But the figures rebounded in the subsequent year, with the value increasing to RM8.27 billion as of Q3 2016.
The overhang situation was worsened by the construction of serviced residences and SoHos on commercial land and their usage as residential properties. In particular, Johor reported the biggest number of unsold completed SoHos and serviced apartments, with the figure nearly tripling from 2,647 units a year ago to 7,714 units as of September 2018. As for overhang in serviced residences, the value reached RM6.16 billion compared to RM4.44 billion for pure residential properties.
Overall, Johor has around RM10.6 billion worth of unsold completed homes, which account for over a third of the national tally of RM27.38 billion. JPPH data also revealed that the state has the highest number of overhang at 6,053 units, up 55 percent from the 3,901 units in September 2017.
According to an official at JPPH, the thousands of unsold completed SoHos and serviced apartments built on commercial land but used for residential purpose exacerbated the overhang situation in Malaysia.
“Buyers bought these units because they were priced at around RM500,000 but they did not know that they have to pay higher serviced charges, utility bills and other taxes because of their commercial status,” said the officer, who wanted to requested anonymity.
“When they get the bills, they are shocked with the high charges.” This could be one of reason why buyers are now shunning serviced residences, he added.
Image source: The Star
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