Many completed homes in certain states remain unsold due to the refusal of the state government to release Bumiputera lots.
In fact, unreleased Bumiputera lots account for around 40% to 50% of the property overhang in Malaysia, reported The Malaysian Reserve citing Real Estate & Housing Developers’ Association (REHDA) Malaysia President Datuk Soam Heng Choon.
“For example, Johor has a 40% Bumiputera quota. Assuming the developer sold 10% of the quota, it still has 30% unsold, and the overhang units get accumulated over time,” he shared at the press conference of the Home Ownership Campaign—Malaysia Property Expo October 2020.
Based on the first half of 2020 Property Market Status Report of the National Property Information Centre (NAPIC), Malaysia has 31,661 overhang residential units valued at RM20.03 billion, up 3.3% and 6.4% from 2H 2019’s 30,664 units worth RM18.82 billion, respectively.
Johor continued to have the highest volume and value of residential overhang, with 6,166 units worth RM4.74 billion. This accounts for 19.5% and 23.7% of the national total volume and value for 1H 2020.
It also retained its title as the state with the highest overhang of serviced apartment, with 15,986 units worth RM14.67 billion, or 73.7% of total volume and 76.7% of the country’s total value. Almost all the overhang units can be found in Johor Baru district.
The overhang within the serviced apartment segment continues to increase, at 21,683 units worth RM18.64 billion, up 26.5% and 24% from the 17,142 units worth RM15.04 billion registered during the June to December 2019 period.
“Everybody needs to play their roles in trying to resolve this issue. The state government controls the release of unsold Bumi lots, so the state government needs to come in and help the situation. As for government agencies, please don’t build houses in lousy locations,” said Soam as quoted by The Malaysian Reserve.
He explained that the divergence in the type of property, prices and location also contribute to the high overhang figure as well.
He underscored that a right product with a right pricing, but placed on a wrong location would not attract buyers, just like a wrong product with wrong pricing, but built at the right location.
In terms of property type, condominium/apartment accounted for 51.4% of the country’s property overhang in 1H 2020, followed by terraced homes which made up 29%.
Properties priced from RM200,000 to RM300,000 formed 19.4% of the total unsold units, while those priced from RM300,000 to RM400,000 made up 13%. Properties priced above RM1 million, on the other hand, accounted for 12.5% of the total unsold residential units in 1H 2020.
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