Home sales improve in third quarter


MALAYSIA’S residential property overhang eased slightly in the third quarter of 2021 on a year-on-year basis, with many attributing the reduction in unsold properties to the nationwide Home Ownership Campaign (HOC).

According to the National Property Information Centre (Napic), there were 30,290 unsold completed residential units (overhang) worth RM19.75bil as at September 2021, compared with 30,926 units worth RM19.99bil in the previous corresponding period.

Of the 30,290 overhang units, 18,829 units (or 62.2%) comprised high-rise units, while 6,803 units (22.5%) consisted of terrace houses.

The bulk of the overhang units were focused mainly in Johor (6,441 units), Penang (4,638 units), Kuala Lumpur (3,863 units) and Selangor (3,376 units).

Napic says 33.7% of the overhang units consisted of units ranging between RM500,000 and RM1mil, while 28.4% comprised units ranging between RM300,000 and RM500,000.

Units below RM300,000 comprised 25.5% of the total overhang, while units above RM1mil (12.4%) consisted of the remaining unsold units during the period under review.

An analyst with a local bank-backed brokerage says the pandemic has had an adverse impact on the local property market.

“It has been a challenging couple of years.

“Still, the property market has managed to rise up to the challenge and the HOC has played a big role in sustaining the sector and mitigating the impact of the pandemic.

“If not for the HOC, we believe the overhang situation would have either remained the same or gotten worse.”

Ruben Kelvin, who is the business development head for City Valuers and Consultants (real estate services) and Greenhill and Mason (design, build and renovation services), concurs that the HOC has played a major role in buffering the impact of the pandemic on the market.

Going forward, he says that real estate, as a segment, remains a safe asset for sophisticated and seasoned investors.

“With restrictions of the movement control order easing up, the rapid vaccine implementation and the economy opening, we expect sales to increase due to pent-up demand amongst investors,” he tells StarBizWeek.

“With the property sector facing an issue of oversupply, as well as the overhang, prices have inched down, making it an easier buy-in.”

With the various initiatives promoting affordable housing, Ruben says the lower and middle income earners are also able enter the market as it starts to recover.

“Also, with more properties for sale in the secondary market due to higher unemployment levels and individuals looking to cut their losses, sellers have had to be competitive with their asking prices.”

The government kicked off the HOC in January 2019 to address the overhang situation in the country.

The campaign, which was intended for six months, was extended for a year. It generated sales totalling RM23.2bil in 2019, surpassing the government’s initial target of RM17bil.

The government reintroduced the HOC in June last year under the Penjana initiative to boost the property market after it was adversely affected by the Covid-19 pandemic. The campaign ends at the end of this year.

According to Real Estate and Housing Developers’ Association (Rehda) deputy president Datuk N. K Tong, as of Sept 30, a total of 73,503 residential units valued at RM47.38bil (after discounts) had been sold since the HOC was reintroduced last year. Discounts worth more than RM9bil were given to buyers during the period.

During a briefing in October, Rehda president Datuk Soam Heng Choon urged the government to consider extending the HOC into 2022, as the campaign had been disrupted for over four months this year as a result of the prolonged nationwide lockdown.

According to Rehda statistics, Selangor dominated sales during the HOC, with 30,888 units valued at RM21.1bil being sold.

This was followed by Kuala Lumpur, which recorded RM11.6bil in sales with 17,468 units sold.

Johor was third highest with 8,723 units valued at RM5.4bil sold, followed by Penang which recorded RM4.5bil in sales with 6,784 units sold.

There was hope that an extension of the HOC would be announced at Budget 2022, which was tabled in October.

However, no initiatives relating to the campaign were announced.

In a statement, also in October, the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia (PEPS) urged the government to extend the HOC at least until June next year, so as to assist potential buyers and help reduce the overhang level in the country.

“Currently, the HOC is only applicable to the primary market.

“To assist owners in the secondary market, PEPS is hopeful that the HOC will be extended to properties in the secondary market as well,” it said.

According to PEPS, the secondary market accounted for 60% to 65% of total residential transactions.

“But in the past few years, this has grown to more than 80%.

“Spurring growth within the secondary market would mean more transactions, which would influence general market sentiment and boost consumer confidence in the sector.

“Furthermore, the secondary market is also a source of houses for potential property owners, including first time homebuyers. By extending the benefits of the HOC to the secondary market, there would be more choices for buyers.”

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 46
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights

Malaysia , residential , property , overhang , home sales ,

   

Next In Business News

Intel's US$20bil Ohio factory could become world's largest chip plant
Shrunken US oil inventories point to chronic under-supply
Royal Dutch no more - Shell officially changes name
Oil price slides, but climbs for 5th week on supply concerns
GLOBAL MARKETS-Bond yields tumble as Netflix fuels stock market sell-off
Rising interest rate fallout unlikely
Policy normalisation can lend support to ringgit
Short Position - Green bond, O&G funding, Going the EV way
Cyber risk alert for banks
Uneven recovery seen for REITs this year

Others Also Read


Vouchers