Amid Overhang Concerns, Real Estate Federation Says Property Market Still Healthy
International Real Estate Federation (Fiabci) Malaysia President Michael Geh said the country’s property market remains healthy, as sales of an estimated 90,000 units of residential properties with a total value of about RM30 billion are expected within the first half of this year.
He said the National Property Information Centre (Napic) recorded total transactions of 52,212 residential units valued at RM18.26 billion for the first quarter of 2019.
“I predict that the total transactions as at June this year will either remain the same as the total transactions between January and June last year or about five per cent less, at about 89,490 transactions at a value of RM30.08 billion,” he said in an interview with Malay Mail today.
Napic reported a total 94,200 transactions for residential units valued at a total RM31.66 billion between January and June of 2018.
Geh referred to a Malay Mail report that a total 8,823 units with a sales value of RM5,727,562,976.13 were sold as at June under the government’s Home Ownership Campaign (HOC).
“These figures do not reflect the entire residential property market as it does not include the secondary market and other projects that were not under HOC,” he said.
He said the bulk of the 94,200 transactions in the first half of 2018 were from the secondary market.
The secondary market recorded 79,020 transactions valued at RM25.48 billion while the primary market recorded 15,180 transactions valued at RM6.18 billion.
The secondary market refers to pre-owned properties sold by real estate agents or home owners to new owners while the primary market refers to new properties sold by developers.
HOC was introduced this year to clear the country’s increasing overhang units which according to Napic totalled 32,936 units of residential properties valued at RM19.96 billion.
According to Napic, a large portion of these unsold units were for properties priced below RM500,000.
Out of the 32,936 units, a total 12,073 units were properties priced below RM300,000 while 8,337 units were properties priced between RM301,000 and RM500,000.
“The large number of overhang units priced below RM300,000 could be due to PR1MA housing stock that were built and completed in less sellable locations,” Geh said.
He said some PR1MA projects have less than 30 per cent take-up rates due to its less sellable locations.
“I believe these units will remain unsold for the rest of the year,” he said.
He admitted that HOC has been effective in encouraging first time buyers to purchase homes but it would not drastically reduce the large number of overhang units.
As for his views on the property market for the rest of the year, Geh believed that the extension of HOC to include the secondary market will further spur the market.
“We can expect to see more transactions and a healthier market for the second half of the year due to this as the secondary market has always been the main driver for the property industry,” he said.
* A previous version of this story contained errors which have since been corrected.
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