With the oversupply situation at hand, AmInvestment Bank Research (AmResearch) believes the revival of the Bandar Malaysia project, with its 10,000 affordable homes, would not bode well for the property sector.
This comes as developers would have to contend with stiff competition considering the affordable housing units’ strategic location, potentially subsidised pricing and public transport connectivity, reported The Sun Daily.
It noted that the development will only “add more floor space to the already oversupplied residential, commercial, office and retail segments in the Klang Valley”.
Nonetheless, the research house expects the integrated development to stimulate new demand should it be able to attract major international financial institutions, Fortune 500 companies and multinational corporations to have their regional headquarters there.
PublicInvest Research, however, reckons the project’s impact will be muted due to the present oversupply in commercial space and soft demand on the back of financing and affordability issues.
“That said, the spillover effect (i.e. high value job creations) from the development should be positive to spur the demand especially the high-end segment in the long term.”
Prime Minister Tun Dr Mahathir Mohamad has announced that the Bandar Malaysia project will include the construction of 10,000 units of affordable housing, a People’s Park as well as bumiputra participation and prioritised use of local content during the construction process.
Image source from Malay Mail