By AFIQ AZIZ / Pic By MUHD AMIN NAHARUL

ANY future housing projects should go through a feasibility study by a professional real estate valuer to avoid property glut issue in the future, Khazanah Research Institute (KRI) research director Dr Suraya Ismail (picture) said.

She also proposed project owners to be held accountable if their projects add to the creation of a glut again.

For longer sustainability, she said the industry must be able to migrate to “build-and-sell” system instead of “sell-and-build” now.

“Sell-and-build will always create gluts since the developers will build once they have achieved 40%-50% sales, but they will usually build 100% (especially in the stratified property) of the increased density plot ratios.

“The tendency to have a 60% glut is real as there is no discipline to respond to real effective demand since they are building not on their own working capital. “This is a systemic outcome of sell-and-build,” she explained.

In Budget 2020, Putrajaya proposed to lower down the threshold for foreign homebuyer from RM1 million to RM600,000 starting next year.

The proposal is applicable to urban high-rise properties as there is a huge oversupply in the segment amounting to RM8.3 billion in March.

Industry players have expressed doubt that the reduced threshold could bring down the residential property overhang substantially, which amounted to RM19.76 billion with 32,810 units remained unsold as for the first half of this year (1H19).

However, Housing and Local Government Minister Zuraida Kamaruddin told the Parliament that the foreign ownership in the Malaysian property market is still under control, with 99.6% or 99,524 units sold to the locals in 1H19.

Still, Suraya said while housing glut is meant to provide an opportunity in making the market more effective and competitive, inferring price tags are inefficient to begin with, especially by inviting foreign market.

“If the high prices are going to be supported by external extra demand (overseas), this will create a ‘locked-in’ position for all local home owners, but at the same time create a more active housing market for overseas buyers (due to stronger currencies),” she said.

Suraya suggested for the government to take an immediate approach to allow market corrections to reduce house prices from 30% to 40% depending on the price range.