PETALING JAYA (April 29): The residential property overhang and unsold residential property situation in the country improved last year (2019).

The number of overhang properties had decreased by 5.1% in volume and 5.2% in value to 30,664 overhang units worth RM18.82 billion respectively, according to the Valuation and Property Services Department (JPPH).

Meanwhile, the number of unsold properties under construction and properties that are not constructed dropped to 72,692 units and 16,774 units, down by 10.2% and 15.6% respectively.

In a media statement released in conjunction with the virtual launch of the 2019 Property Market Report today by Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz, JPPH said Johor still has the highest overhang volume and value in the country with 5,627 units worth RM4.7 billion, accounting for 18.4% and 25.0% respectively, of the national total. 

Perak came second with 5,024 units worth RM1.52 billion, followed by Selangor (4,687 units worth RM3.75 billion) and Penang (3,353 units worth RM2.59 billion). 

About 40.9% (12,528 units) of the overhang properties were residential units sold above RM500,000.

Residential properties priced between RM300,000 and RM500,000 formed 25.7% or 7,883 units of the overhang properties.

Unsold serviced apartments continue to rise

JPPH said the overhang in serviced apartments continued to worsen, forming the bulk of the overall property overhang. 

There were a total of 17,142 overhang services apartment units worth RM15.04 billion last year up by nearly 51% in volume and 65% in value year-on-year (yoy). 

However, the unsold under construction and not constructed number of serviced apartments declined to 33,827 units and 7,659 units, down by 9.3% and 40.5% respectively.

Johor recorded the highest serviced apartment overhang with 71.2% share of the total volume (12,207 units) and 76.9% share of the total serviced apartment overhang value (RM11.56 billion). 

A majority of the overhang units is in the Johor Bahru district, accounting for 99.2% of the state’s overhang (a total of 12,105 units worth RM11.5 billion). 

The state also held 34% share (11,490 units) of the country’s unsold properties under construction.

In terms of pricing, 37.4% of the overhang serviced apartments were priced above RM1 million. About 20.3% of the total unsold under construction and 19.5% of the total unsold not constructed units were also priced above RM1 million.

The other 33% of overhang serviced apartments were in the price range of RM300,000 to RM400,000. 

JPPH said despite the economic headwinds, Malaysian property market is expected to remain resilient in the coming year. 

“Affordable housing and finding the right solutions to the property overhang will continue to be the main agenda of the government,” said JPPH.

The close monitoring on the implementation of programmes under the National Housing Policy 2.0 (2018 – 2025) and various incentives introduced to promote home ownership among Malaysians, are expected to contain the overhang situation in the coming year.

As Bank Negara Malaysia expects the Malaysian economy to rebound in 2021, in tandem with projected global recovery, the property market is anticipated to move in a similar trajectory. 

“JPPH Malaysia will continue to monitor and evaluate the expected impact of the pandemic on the Malaysian property market and provide advisory to the government in ensuring that the market remains sustainable,” said JPPH.

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