By IZZAT RATNA / Pic By TMR
Unsold residential properties rose to a record high of 24,738 units last year — valued at RM15.6 billion — as the country continues to grapple with the overhang issue that could negatively impact the financial system.
The value of the unsold homes — which do not include service apartments and SOHO (small office/home office) units — is 82.8% higher than a year ago, risking the sector to systemic impact in the event of financial shocks.
Bank Negara Malaysia had sounded its alarm bells over the property glut. In its 2017 annual report, the central bank said there were 129,052 unsold housing units at the end of the third quarter of 2017 compared to 146,497 units at the end of the first half of 2017. More than 80% of the unsold units were priced at RM250,000 and above.
The Valuation and Property Services Department (JPPH) in its Property Market Report 2017 said there is a rising concern on the overhang for residential units.
“These overhang numbers which only accounted for those in the residential sector — excluding serviced apartments, SOHO, etc — were the highest to be ever recorded,” according to the report.
The unsold homes are residential units unsold for more than nine months and have received the Certificate of Completion and Compliance.
During the January-December 2017 period, 194,684 transactions in the residential sector were recorded and valued at RM68.47 billion, a 4.1% drop compared to 2016.
For the whole property sector, 311,824 transactions valued at RM139.84 billion were recorded, down 2.7% in volume and 3.8% in value compared to 2016.
Due to the rising glut, JPPH had asked developers to undertake a comprehensive market study before embarking on any projects.
Johor has the highest unsold homes with 4,378 units, or 17.7%, from the total residential overhang, followed by Penang (15.8%) and Kedah (15.3%).
JPPH, a body under the National Property Information Centre (Napic), is formulating new strategies to address the rising overhang.
DG Nordin Daharom said the new strategic initiatives will involve JPPH, Napic and the National Housing Department through knowledge-sharing sessions.
“This knowledge-sharing process can help the government implement policies for new property developments and help reduce the rising number of unsold units across all sectors with reasonable pricing points,” he said after the launch of JPPH’s Property Market Report 2017 in Serdang yesterday.
However, he said the initiatives are at the preliminary stage and will not at this point involve private developers.
JPPH also unveiled a new portal, “Unsold Property Enquiry System Malaysia” to enable users to search for information on unsold properties.
Nordin said the portal will provide estimates of unsold properties based on individual local authorities.
Nordin said the new system will help developers and the government adopt a strategic approach for more effective basic decision-making processes and aid the sector’s recovery process.
He said the information can also be used by developers to make informed decisions before developing products for the market.
“However, we will not impose any penalty to developers that continue to develop projects without seeking guidance from the available data, as Malaysia remains as an open economy.
“But in my opinion, if they know that the area is facing a severe glut with a low demand, I don’t think any developers would want to venture within that location without dampening their profit margins,” Nordin said.