Property Market: The Unsold Units Dilemma

A total 30,290 units of completed houses with a value of RM19.75 billion were reported unsold in the third quarter of 2021.

Deputy Housing and Local Government Minister Datuk Seri Ismail Abdul Muttalib said data by the National Property Information Centre (NAPIC) revealed a 2.64 per cent decrease in the number of unsold residential units in the third quarter compared with the second quarter of the year (a total 31,112 unsold completed houses worth RM20.1 billion). The slight drop in unsold housing properties, he said, was attributed to numerous promotional efforts by developers including reducing prices or offering discounts to house buyers.

Kuala Lumpur, Penang, Selangor and Johor recorded the highest number of unsold houses.

(source: iCompareLoan)

Among the factors that contributed to the property overhang were supplies that did not match the demands in localities, prices and household income mismatch and unattractive locations of housing projects, as well as house buying transactions through sub-sales. A big data analytics study is being conducted which is expected to be completed by May 2022.

There is a need to establish a repository data centre to enable main industry players to use the same data for projections related to housing supply and demand, affordability, available financing, housing financing schemes, policy development and forecast for housing needs.

Another measure used is the Home Ownership Campaigns (HOC), which has stamp duty exemption and a 10 per cent discount on houses priced between RM300,000 and RM2.5 million by developers registered with the Real Estate and Housing Developers' Association Malaysia (Rehda).

The ministry (Housing) is considering extending the HOC, originally slated to end 2021.

The residential property market is expected to remain sluggish for the foreseeable future. Why? The general economic recovery is likely to be tepid with Omicron and other matters still to be resolved. Then there is the issue of MM2H and foreign buyers looking elsewhere for investment.

Reference:

RM19.75 billion worth of unsold houses in Malaysia, Nuradzimmah Daim, New Straits Times, November 23, 2021 (https://www.nst.com.my)