Napic hopes developers will carry out feasibility study to reduce overhang

PETALING JAYA: The National Property Information Centre (Napic) hopes that a feasibility study would be made compulsory for every property developer to undertake to help reduce the overhang or completed but unsold properties in the country.

Napic deputy director Ari Adam said, without making the feasibility study 'a must', the country would continue to face the existing overhang, the incoming overhang units under construction and the future overhang units.

"The reason why it is not compulsory is because we (government) cannot hold back or block or discourage developers from developing their own land.

"Thus, when it becomes unsellable, it will become every stakeholders' problem (including political and ministry) because there will be an element of mismatch or mispricing," he told Bernama after the release of the Real Estate and Housing Developers' Association's (Rehda) Property Industry Survey 2H 2022 and Market Outlook for 2023 here, today.

Ari said the feasibility studies issue had been brought to the attention of the Local Government Development Ministry, whereby it hoped this would establish the fact that only certain properties of certain types in certain location could be built to suit the population and geography, or else, the problem of overhang would continue to occur.

"At the same time, we also need to address the issues of the current overhang, and the incoming ones under construction and the future supplies... what are the developers going to do about this?" he asked.

Currently, he said that Melaka is the only state in the country that emphasised on the submission of feasibility studies.

Meanwhile, on the outlook for 2023, based on observation and Napic's data for 2022, the overall property market activity would continue to be positive following higher record of volume which went up by 34.1 per cent to 357,000 units from January to November 2022, from 266,000 units in the same period in 2021.

The value of transactions also increased by 26.6 per cent to RM162 billion from RM128 billion previously.

"However, the data is telling us that the people are moving towards the secondary market and this was also in line with a study by Khazanah Research.

"We saw that although the younger generation may like living in condominiums or strata units, soon after a few years, they want to opt for single-storey terrace houses or double-storey terrace houses, if they can afford.

"Reason being, they want to have peace and don't want to be disturbed by lack of parking spaces, noisy neighbours and rules made by the condominium/strata management that could be troublesome and inconvenient for them," Ari added.

Napic, the source of quality data and authority on property market information, is under the purview of the Valuation and Property Services Department, Ministry of Finance. - Bernama