21 November, PETALING JAYA – The residential property overhang in the country, which worsened in the first half of 2017 (1H2017), is mainly due to the high number of unsold completed PR1MA units in Kedah.
According to the Property Market Report for First Half 2017 published by the Valuation and Property Services Department (JPPH), Kedah surpassed the overhang numbers in Johor, capturing nearly 21% (4,363 units) of total national overhang.
“The turn of event was due to the unsold completed units, which are mostly PR1MA projects in Kuala Muda District and Baling District. Kuala Muda District recorded 3,401 completed unsold units, of which nearly 69% comprised PR1MA houses priced mostly in the range of RM300,000 to RM400,000,” it said in the report.
In Baling District, JPPH said, there was a fair share of overhang between PR1MA houses and other private developments, which were mostly double-storey terrace units in the RM200,000 to RM250,000 range.
Johor stood second with more than 18% of national overhang share, which mainly comprised double-storey terrace and apartment/condominium units priced from RM500,000 to RM1 million and RM400,000 to RM500,000 respectively.
Nationwide, unsold units grew to 20,876 units worth RM12.26 billion in 1H2017 from 13,438 units worth RM7.59 billion a year ago.
For 1H 2016, Johor recorded the highest overhang nationwide, accounting for 21.1% (2,831 units) of the total 13,438 units. By type, two- to three-storey terraced units (27.3%) and condominium/apartment units (23.7%) dominated the overhang.
In terms of new residential launches, 28,397 units were launched in 1H 2017, reflecting a 9.1% decline from 31,257 units launched in 1H 2016. Sales performance was low at 23.9%.
Kuala Lumpur recorded the highest number of new launches, accounting for nearly 30% of the national total, followed by Pahang, which accounted for nearly 15% of the national total. The total number of new launches in Pahang stood at 4,196 units in 1H2017.
“The upsurge in launches was attributed to the PR1MA Pahang houses, where more than half are concentrated in Kuantan (2,203 units). There were other state and federal-led PR1MA housing launches, across the districts in the state. Sales performance, however, remained low in the first six months of the year,” said JPPH.
PR1MA did not respond to queries from SunBiz about the report.
Bank Negara Malaysia’s (BNM) quarterly bulletin had emphasised that 83% of the 130,690 unsold residential units in the first quarter of 2017 were priced above RM250,000.
“Over the period 2016 to 1Q 2017, only 21% of new launches were for houses priced below RM250,000. This is insufficient to match the income affordability profile of about 35% of households in Malaysia,” said BNM.
It further explained that unsold residential units priced below RM250,000 reflected the unattractive location of some affordable housing projects due to factors such as distance from workplace and low transport connectivity, and preference for landed over high-rise properties.
“Thirdly, applicant registries maintained by providers of affordable housing may comprise many non-creditworthy applicants, resulting in delays in the allocation of affordable homes”, BNM said.
The central bank suggested that a single entity for affordable housing be established to accelerate the rebalancing of supply towards the affordable range while ensuring new projects are in decent locations with good transport connectivity.
To increase efficiency in allocation of affordable homes, applicant registries should be regularly updated, verified and filtered to prioritise creditworthy households while ineligible applicants should be directed to rental housing, it added.
– THE SUN