CBRE WTW managing director Foo Gee Jen has called on property developers to adjust home prices with market demand.
He noted that developers should study and relook at the country’s residential segment, which is attracting potential buyers, rather than being concerned only of their own profitability.
This comes as 73.3 percent of the 49,542 units completed last year were priced from RM250,000, with most units in Malaysia’s major cities deemed unaffordable.
He revealed that 50 percent of the homes completed in 2017 were priced between RM250,000 and RM500,000, while almost 23.3 percent were priced above RM500,000.
“With Bank Negara Malaysia reporting the average price of affordable housing at RM250,000 and below, residential properties in Kuala Lumpur and Selangor remain unaffordable,” said Foo at a conference organised by the Real Estate and Housing Developers’ Association Malaysia (Rehda) Institute.
“A Khazanah Investment Institute report said that residential properties in Kuala Lumpur are at the very non-affordable level, with most properties priced above RM490,000, followed by Selangor at an average property price of RM300,000 as compared to market price of RM223,704.”
With this, a total of 24,738 completed homes were unsold last year, with condominium and apartment units accounting for 38.4 percent.
Based on price breaks, 22.7 percent of homes priced from RM500,000 to RM1 million dominated the excess in unsold property units.
Foo explained that Malaysia needs 97,500 residential units per year, based on last year’s average population growth of 390,000. However, only 94,198 residential units were completed last year, reported the New Straits Times.
The lack of infrastructure and facilities as well as connectivity and access caused a slight drop in home sales.
“This includes Kedah with 3,783 unsold units followed by Selangor with 3,713 units and Kuala Lumpur (929 units).”
He added that the supply of studio units or small office home offices (SOHO) in big cities were also not suitable for families as they were “as wide as shoe boxes”.
“Unrealistic and non-ideal sizes of property for long term stay, as well as poor construction quality affect the quality of life in general.”
Image sourced from Trip Expert
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