fbpx

Overhang residential units in Penang up by 44%

December 24th, 2018 Leave a comment 中文版

2018-overhang

Malaysia is entering 2019 with unsold completed residential units rising to 30,115 units as at Sept 30, 2018, an increase of 48.35% from the 20,304 units a year ago.

According to the Valuation and Property Services Department’s (JPPH) latest figures released on Saturday, the total value was RM19.54bil, a 56.44% rise from RM12.49bil a year ago. Should serviced apartments and small offices home offices (SoHos) be included, the overhang value rose to 40,916 units, valued at RM27.38bil.

JPPH defines an overhang as completed unsold units nine months after issuance of certificates of fitness, signifying from the authorities that a dwelling is fit for occupation. The unsold units are across the board from RM50,000 or less to more than RM1mil. The concentration begins even from the RM200,000-RM250,000 segment with about 3,500 unsold while the bulk of the overhang are priced RM500,000 and above, with more than 12,000 units.

The government and the Real Estate Housing Developers Association are planning to launch a national home ownership campaign in January to resolve this blemish on the property sector. Individual developers are currently putting last minute tweaks to their campaigns.

Among those looking forward to unveil their bags of goodies are the Eco World group, Sunway and Mah Sing, just to name a few.

The overhang has been rising in terms of units and ringgit value for a few years now, with the exception of 2015 when the number of overhang units decreased to 8,804 units, valued at RM3.64bil. However, the numbers took off again a year later, with unsold units valued at RM8.27bil in the third quarter of 2016.

The situation then and now is further complicated with the completion of serviced apartments and SoHos which are built on commercial land, but which are also used for residential purposes.

Johor has the largest number of unsold completed serviced apartments and SoHo units at 7,714. It rose 191% from the 2,647 units recorded a year ago. The overhang in serviced apartments is valued at RM6.16bil compared with its residential overhang of RM4.44bil. This means the total overall value of its unsold serviced apartments are 1.5 times that of residential housing.

This brings Johor’s total overhang to about RM10.6bil, or more than a third of the national RM27.38bil figure, excluding other forms of unsold commercial properties like offices and retail in the state. Going by JPPH reports, Johor has the highest number of completed unsold units in the country, with 6,053, a 55% increase from the 3,901 units a year ago.

A source from the JPPH said the country’s overhang scenario has somewhat changed with thousands of unsold serviced apartments and SoHos, a feature of urban centre living.

To circumvent high property prices, developers shifted their focus by building shoebox-sized units built in urban centres on commercial land which has a higher value than residential land.

Local authorities also convert land to commercial status in order to get higher land premiums from developers. Owners of these units also pay high taxes to the local authorities.

Developers “cut” the units smaller to bring the overall price down to give an illusion of affordability.

The JPPH source said: “Buyers bought these units because they were priced at around RM500,000 but they did not know that they have to pay higher serviced charges, utility bills and other taxes because of their commercial status.

“When they get the bills, they are shocked with the high charges,” the source said. That is one of the reasons why buyers may be staying away from serviced apartments, he said.

It is also difficult to bring up a family in such homes because of the small size of these units. A minimum size of 1,200 sq ft with three bedrooms would be more ideal, he said.

Among the states that have a serious overhang are Johor, Selangor, Penang and surprisingly, Kedah. Known as the rice bowl of Malaysia with its paddy-farming community, Kedah with an estimated population of about 2 million, has an overhang of 3,450 units, reducing marginally by 2.38% from a year ago. Selangor’s residential overhang rose to 4,524, up 25.81% while Penang, up 43.59% to 3,261 units.

He said JPPH depends on data fed to them by developers. Developers holding back information will not give a true and fair view of the situation. According to JPPH’s latest report, Kuala Lumpur has no unsold completed serviced apartments/SoHos.

Source: TheStar.com.my

 

Categories: Property News Tags:
  1. Oh nice
    December 24th, 2018 at 10:51 | #1

    “Kuala Lumpur has no unsold completed serviced apartments/SoHos..” how could this possible ?

  2. Tom Snell
    December 24th, 2018 at 10:52 | #2

    The problem is exacerbated by something that is not even mentioned in this article. The number of unoccupied residential units, both new and not so new, should also be a major point of concern. The developers don’t seem too concerned about this, but both the developers and the governments should be.

  3. BigSausage
    December 24th, 2018 at 12:05 | #3

    Concerned or not, that’s the reality, and we should let the free market take care of things. Data shows our banks are smart enough to lend only to credit worthy customers (developers & home buyers), there’s no sign of contagion effects, overall a good lesson for all. The growth engine for our country should be export & manufacturing, and once you have that, properties will automatically prosper.

    As long as we don’t some stoopid things like loosening lending criteria for the undeserved (like what was suggested by LGE), or make credit too easy for the greedy, things will end up fine while supply and demand will gradually converge.

  4. Carlsuelino
    December 24th, 2018 at 12:10 | #4

    Yes, overhanged but only confine to apartments and flats. In Penang island itself, landed properties are very well sought after especially in good area like Pulau Tikus.

  5. robin
    December 24th, 2018 at 20:26 | #5

    @Carlsuelino

    really?
    so many abandoned houses there

    cant sell due to too expensive

    pulau tilus no more like last time… its a jam pack area unwanted by many

  6. How long
    December 26th, 2018 at 21:17 | #6

    For free market to clear glut…big question now

  7. star
    December 27th, 2018 at 08:50 | #7

    UUUBBB

  8. Ziggi
    December 27th, 2018 at 16:27 | #8

    How long? It does not matter. We just have to do the right thing, whether painful or not. Its not right to use un-needed properties to pump prime our economy. We need solid productive industries to pump prime economy, not properties.

  9. Casper
    December 28th, 2018 at 07:34 | #9

    Empty too long Casper moves in..

  10. star
    December 28th, 2018 at 15:28 | #10

    @Casper
    eeeee geli

  1. No trackbacks yet.
(You can also Login/Register to submit your comment using unique ID)


Comment Guidelines
  • Avoid political discussion.
  • Comments with inappropriate wordings or personal attack may be moderated or deleted.
  • Developer must register before comment. All anonymous comments claimed to be from developer without registration will be deleted.
  • All advertisement in the comment will be deleted. Please contact us for advertising details.


Related Properties for Sale/Rent @
Advertise your property at PenangPropertySale.com and it will be shown here. (Only listing with photo)

To advertise your property in this page under "Classified Ads":
 1. Submit your property at PenangPropertySale.com, it's FREE!
 (Please do not advertise your property in the comment)
Like us on Facebook