Condominiums and apartments overhang worsens in first-half 2017

November 14th, 2017 Leave a comment 中文版
Picture for illustration only

Picture for illustration only

The overhang in stratified properties or apartments and condominiums has worsened, with the number of unsold units rising 40% to 20,876 units in the first half of the year (H1 2017) from 14,792 units in H2 2016.

Deputy Finance Minister II Datuk Lee Chee Leong said the 20,876 units are worth RM12.26 billion and are dominated by apartments and condominiums priced between RM500,000 and RM1 million.

“It is an issue of pricing and affordability as well. Whether this will result in reduced prices, that will depend on the location of the supply, whether the residents around there can afford it or not,” he told reporters at a briefing on the Property Market Report for H1 2017 today.

According to the report published by the Valuation and Property Services Department (JPPH), Kedah surpassed Johor in overhang numbers, with nearly 21% (4,363 units) against the latter’s 18%, followed by Selangor with 17%. Kuala Lumpur made up just 3% of the total overhang.

Residential units that were unsold and under construction also increased, rising 6.5% to 68,245 units in H1 2017 from 64,077 units in H2 2016. The majority of these units too were stratified properties.

Due to the challenging market condition, new residential launches fell 9.1% to 28,397 units in H1 2017 from 31,257 units in H1 2016. Most of the launches were in the RM400,000 to RM500,000 price range with sales performance of 28.9%.

On the construction front, more housing starts were recorded, increasing 16% to 67,662 units in H1 2017 from 58,348 units in H1 2016. Completions and new planned supply reduced to 43,132 units and 43,133 units respectively.

“As at end June 2017, there were 5.35 million existing residential units with nearly 0.49 million in the incoming supply and 0.42 million in the planned supply,” said Lee.

JPPH (operation) deputy director general Dr Zailan Mohd Isa said the 16% increase in residential starts shows that investors are confident in the economy.

“These are investors, billions involved. So if you look at property as an indicator of the economy, it is a good sign of our property industry,” she said.

On whether the market will be able to absorb the new supply of homes, National Property Information Centre (Napic) director Khuzaimah Abdullah said the impact is yet to be seen.

“I am sure the developers are very prudent people. If there are no takers, no buyers, I’m sure they would hold off construction because once you are into the construction stage, there’s no turning back. If you have not started then you can hold on,” she said.

In the office and retail sectors, occupancy rate was above 80% but unoccupied space remained high, with 3.4 million square metres of unoccupied private office space.
Kuala Lumpur recorded the highest unoccupied space with more than 1.62 million square metres, followed by Selangor with 0.87 million square metres.

The retail sector recorded more than 2.79 million square metres of unoccupied space, reflecting an increase of 2.6% from the preceding half. Selangor and Penang Island recorded higher unoccupied space of more than 0.5 million sq metres.

“I must emphasise that both issues – residential overhang and commercial space vacancy are pertinent issues that must be addressed by all parties, particularly local authorities and property developers. Both must exercise due diligence before arriving at development decisions to avoid oversupply,” said Lee.

Overall, the property market continued to soften in H1 2017, recording 153,729 transactions, a decline of 6% from 163,527 transactions recorded a year ago. However, the overall value of transactions rose 5% to RM67.82 billion from RM64.60 billion a year ago.

Lee said the property market is expected to remain soft in the next couple of years but will be supported by various property-related incentives and accommodative monetary policy.

Source: TheSunDaily.my

Categories: Property News Tags:
  1. toothlessdevils
    November 14th, 2017 at 14:45 | #1

    Nice to hear… drop the price yo… 😀

  2. PityMe
    November 14th, 2017 at 17:22 | #2

    The beaten speculators have two bridges to choose. So far no survival, 100% hit rate.

  3. kay
    November 14th, 2017 at 18:07 | #3

    This glut is the worst anyone has ever seen in malaysian history. And yes, at Tropicana Bay Residence alone, there’s already up to 150 units for which the loans have been defaulted, and there’s more to come. Very bad situation.

  4. Beckham
    November 14th, 2017 at 22:30 | #4

    500k above all stuck. die die die all. buyer all can wait for it drop to 400k or 300k only go in.

  5. Bitch
    November 15th, 2017 at 10:33 | #5

    @kay

    whats your source of info for the rate of defaulters?

  6. Jibby
    November 15th, 2017 at 11:12 | #6

    Bitch :
    @kay
    whats your source of info for the rate of defaulters?

    From Marketing agent, plenty of units of Bay Residence available. Situation is not bad, the seller/marketing just want to paint a buy for these properties but in fact it is opposite

    Good News !!!
    left 800sft & 872sft for sale come with 2 car parks !!!
    from rm 691k to rm 740k++
    Star Your investment with Rm 5,000 Booking Only !!!
    free legal fee
    ZERO DOWNPAYMENT

  7. alex
    November 15th, 2017 at 12:00 | #7

    Most of the buyers for tropicana Bay is purchased through money game income. Now money game burst already, the defaulter will be more now.

  8. Kalissmu
    November 17th, 2017 at 15:28 | #8

    @Jibby
    “Good News” lol

  9. NgSoonHeng
    November 18th, 2017 at 15:46 | #9

    @kay
    U sure ma ah Gay, why so many har. But i see lelong no have also.

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