According to a recent NST report, Malaysia may be heading for another property glut, this time with almost 100,000 residential units — comprising completed, under construction and yet to be built homes — having no buyers in the first three months of 2025.
Based on data from the National
Property Information Centre (Napic), which records development approvals
granted by local authorities, homes in the "affordable" bracket,
priced between RM200,001 and RM300,000, account for the largest overhang, trailed
closely by those in the RM300,001–RM400,000 range.
On an optimistic note, the bulk
of these homes are still under construction or have yet to be built, which
gives developers time to secure buyers.
However, if left to grow
unchecked, this may result in abandoned units.
According to Napic, in the first
quarter of this year, 12,498 new residential units were launched nationwide,
with 1,351 units or 11 per cent sold within the first three months — figures
that appear pleasing at first glance.
Properties priced between
RM400,0001 and RM500,000 accounted for the largest share at 3,348 units (26.8
per cent), followed by those between RM200,001 and RM300,000 at 2,233 units
(17.9 per cent), and RM300,001 and RM400,000 at 2,002 units (16.0 per cent).
Almost 40 per cent (4,853 units)
of the units launched were two- and three-storey terraced houses, followed by
condominiums/apartments at 27.2 per cent (3,396 units) and single-storey
terraced houses at 22.5 per cent (2,815 units).Johor recorded the highest
number of launches with 3,194 units, followed by Selangor (2,129), Negri
Sembilan (1,838) and Perak (1,812).
Overhang units are defined as
"completed properties" that have been awarded a certificate of
completion and compliance by the local authorities, but remained unsold for
more than nine months.
According to Napic data, there
were 23,515 such units nationwide in the first quarter of 2025. What should
trigger concern is the "affordable" homes priced between RM200,001
and RM300,000 accounting for the largest share at 4,861 units, or 20.7 per
cent. This is compounded by the 4,201 units (17.9 per cent) in the RM300,001 to
RM400,000 segment and 3,024 units (12.9 per cent) in the RM500,001 to RM600,000
range.
Condominiums and apartments
dominated the overhang status with 13,386 units, accounting for 56.9 per cent,
while two- and three-storey terraced houses recorded 3,560 units, or 15.1 per
cent.
Perak stood out for having the highest number of unsold completed homes in the RM200,001 to RM300,000 range with 1,254 units. This was followed by Kuala Lumpur with 880 units, Pahang (647) and Penang (624). In Melaka, the market is dire — the bulk of overhung homes was in an even lower price range, where 181 units between RM100,001 and RM200,000 were left unsold.
The Napic data showed that the
median house price in the first quarter was RM359,000, but the Statistics
Department found that the national median household income was just RM6,338 a
month.
Going by Bank Negara Malaysia's
median multiple measure — which considers a home to be affordable if it costs
no more than three times the median annual income — the affordability ratio for
most Malaysian households would stand at 4.72, which is well above the
threshold.
A household needs to earn about
RM9,972 a month to afford a home with a median price of RM359,000. However,
based on the statistics, the median price of houses that most Malaysian
households could technically afford is RM228,168 only. The gap is especially
significant in Sarawak, where households earned a median of just RM4,978 a
month, but the median price of houses there was RM395,000, which is higher than
the national price.
In Johor, which had the largest
number of new launches, households earning a median of RM6,879 a month had to
contend with a median house price of RM450,000. Even more perplexing is the
RM500,000 and above price tag for 2,015 newly launched units, putting them far
out of reach for typical income earners.
Penang had the most overhang of
high-end units, with 646 priced above RM1 million remaining unsold. The state's
second-highest unsold category was surprisingly in the RM200,001 to RM300,000
range.
Sabah showed a similar pattern,
recording 559 unsold units in the RM500,001 to RM600,000 bracket and 446 units
priced above RM1 million. In Selangor, the overhang was also concentrated in
high-end homes, with no takers for 375 units costing between RM500,001 and
RM600,000 and 327 units above RM1 million.
What can we do? Three options:
(i)
Do nothing.
(ii)
Re-align approvals for future development; or
(iii)
Create a nationwide “property bank” to purchase and re-sell properties.
For (iii) to work,
substantial funding is required from public and private sectors. Will that
happen? Not in the immediate future!
References:
Nearly 100,000
homes remain unsold in the first three months of 2025, Aliza Shah, Iylia Marsya
Iskandar, New Straits Times, 1 September 2025
The sticky stats of
overhang properties, Pankaj C. Kumar,
The Star, 20 September 2025
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