Deputy Finance Minister Datuk Lee Chee Leong with Valuation and Property Services Department director-general Nordin Daharom (left) at the launch of the Property Market Report for H1 2017 in Putrajaya on Monday. MOHD SAHAR MISNI/The Star
KUALA LUMPUR: The Valuation and Property Services Department, which is part of the Finance Ministry, threw out some interesting nuggets on Monday, Nov 13 in Putrajaya.
The platform was the launch of the Property Market Report for H1 2017.
Finance Minister Deputy Finance Minister Datuk Lee Chee Leong graced the event followed by a Preliminary Property Market Brief 2017 by National Property Information Centre director Khuzaimah Abdullah.
Below are highlights of Lee and Khuzaimah’s analysis of the property sector for the first half of 2017
Overhang balloons to RM12.26bil
The number of unsold, but completed units, known as an overhang, hit a high of RM12.26bil as at the 1H2017. This is a rise from RM8.56bil a year ago, representing a rise of 40% (1H2015: RM4.92bil).
This overhang is rising across all states with the worse being Kedah (4,363 units), Johor (3,803) , Selangor (3,664), Perak (2,136) and Penang (2,041).
Most of the unsold units comprise high-rise units in the RM500,001 to RM1mil category because so many were launched the last several years. Units RM1mil and above also suffer this same dilemma.
In terms of value, RM3.44bil worth of high-rise were unsold while up to RM5.07bil in the RM1mil and above segment are still looking for owners.
These unsold units represent a huge holding cost to developers. The function of a developer is to build properties and their aim is to sell as fast as possible. Once a unit is sold, they get their progressive payments.
If units remain unsold by the time the project is completed means they are left holding the baby. Total unsold units reached 20,876 compared to 14,792 units a year ago.
2018 expected to be soft
We are just about six weeks away for 2018. Going forward, the horizon seems rather bleak. Residentials continue to make up about 60% of transactions by volume, by value 48.4%.
The positive side is the degree of price increase is not as exorbitant -- prices are moderating.
The Malaysian House Price Index (MHPI) up to 1H2017 continued to rise at a moderating trend with the MHPI at 184.1 points (2010: base year), up by 5.6% on annual basis.
This is unlike the period between the second half of 2011 and first half of 2014 when the annual change was between 9.4% and 14.3% when house prices rose incredibly.
Volume down, value up
There were 153,729 transactions recorded worth RM67.82bil, indicating a decline of 6.0% in volume but value rose by a marginal 5.0% and this is to be viewed positively.
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