KUALA LUMPUR: IJM Land Bhd has unsold properties totalling about RM1bil throughout the country, but this figure includes bumiputra units which can only be released in the open market after getting government approval.
Managing director Edward Chong said up to 95% of these unsold properties are landed and high-rise residential units, while the rest are commercial properties. He was speaking to the media at a Hari Raya lunch yesterday.
IJM has projects in Penang, the Klang Valley, Johor, Seremban, Sabah and Sarawak.
Explaining the RM22.26bil worth of overhang residentials totalling 34,532 units in the country as at the end of March 31, highlighted by the National Property Information Centre (Napic) at the end of June, Chong said the term “overhang” must be viewed objectively.
He said the company’s unsold stock includes bumiputra units. In some projects, developers have to put aside up to 40% of total units built for this purpose. Although these units are not sold, they need not necessarily fall into the “overhang” category.
There is a difference between overhang and unsold units. Napic defines overhang as completed units which have been certified fit for occupation but remain unsold despite having been put on the market for at least nine months.
“I am not saying there is no overhang in the country, but this figure (of RM22.2bil: 33,532 units) may be inflated,” he said.
Chong said it is hard to say how much of it comprises bumiputra units because each state has a different release mechanism as to when the units can be released for sale in the open market.
Chong said the slower pace in which developers’ units are sold, coupled with more units being launched, may also inflate the figure.
So, there is an increase in the overhang figure simply because sales are not moving as quickly as before, he said.
Chong said the company has RM1.5bil worth of new projects, 85% of them residential units, to be launched until March 2019 in the country. The company’s financial year is from April to March.
“We are mainly involved in township development which involves all segments of residential units. So, we have the flexibility of not going ahead with launching high-rise apartments. We find that landed units up to RM1mil have strong demand while for high-rise units, those priced up to RM800,000,” he said.
Chong said for units priced at about RM500,000, the company is mindful of the per sq ft (psf) price. There may be demand for a RM500,000 unit if it has a built-up area of 1,000 sq ft, but not for a built-up of 500 sq ft.
On his hope for the property sector under the new government, Chong said the Real Estate and Housing Developers’ Association has expressed to the new government the need for a single agency to collate and mine data submitted by developers.
“Timely and transparent information will give us a level playing field,” he said.
Chong said developers would like to encourage the government to gazette the structure plan in the respective states. This gives transparency as to what can be built at a particular location, what is the plot ratio and other information that would help a developer size up a site.
“Under the previous government, I may have the know-how but am given a lower plot ratio, while another who does not have the know-how but has the know-who is given a high plot ratio,” said Chong.
Separately, the Selangor state executive council (exco) on housing and urban living said it is aware of the unsold residential units in the state.
Chairman for the state committee on housing and urban living Haniza Mohamed Talha said this situation is the result of “excessive” pricing, making these unsold units beyond the reach of many.
“Many are not eligible nor financially qualified to purchase the units,” she said in a statement.
Haniza said the department’s data revealed that there are 44,454 eligible applicants out of 156,138 applications for the Rumah Selangorku affordable housing scheme.
“Under (this scheme), an applicant is successful if the applicant does not possess other property and the income does not exceed certain parameters. We interpret this data to mean that the demand for residential units, especially affordable ones are high,” she said.
“However, regarding the unsold completed residential units in question, we believe that the price of such units is prohibitive to would-be applicants,” she said.
Haniza said the state exco will engage with developers, associations of buyers, financial institutions, suppliers, contractors and other bodies as part of a series of proactive steps to address the issue of unsold residential units.