With overhang residential units reportedly soaring 67.2 percent to 24,738 units, analysts are concerned that the influx of affordable housing units by private and public entities may worsen the overhang situation, reported The Edge.
Affordable housing is variously defined by different consultancies and authorities as homes priced below RM500,000 to below RM200,000.
Overhang residential units, on the other hand, refer to houses (excluding serviced apartments, small offices/home offices and similar properties) that remain unsold nine months following completion.
In a report, the Valuation and Property Services Department (JPPH) has revealed that the value of overhang residential units jumped 82.8 percent to RM15.64 billion.
“You’ve got an increasing overhang and a growing number of launches, but demand is relatively flat, and now the market is being flooded with affordable housing products. So, what will happen to the unsold inventories?” asked an analyst, who declined to be identified.
In Kuala Lumpur, for instance, 22,112 units of high-rise homes were launched last year, most of which were from the Federal Territories Affordable Home Programme (Rumawip) and the 1Malaysia Civil Servant Housing Scheme (PPA1M), said the JPPH report.
While 26 percent were priced from RM400,000 to RM500,000, and another 25.9 percent at RM250,000 to RM300,000, the report noted that take-ups only stood at a mere 19.5 percent.
“So, a potential question down the road is whether there is a need to regulate affordable housing supply. Right now, there is no control on supply,” said the analyst.
Image sourced from Trip Expert
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