KUALA LUMPUR: The excess of unsold residential units in the country is believed to be due to mismatch in pricing, less attractive locations and unmatched product offerings.
CBRE WTW managing director Foo Gee Jen said almost 73.3 per cent or 36,314 units from the overall 49,542 units that were completed in 2017 were priced at RM250,000 and above, with most units in major cities considered unaffordable.
He said half of the residential property are priced between RM250,000 and RM500,000 and almost 23.3 per cent or 11,543 units are priced above RM500,000.
“With Bank Negara Malaysia reporting the average price of affordable housing at RM250,000 and below, residential properties in Kuala Lumpur and Selangor remain unaffordable.
“A Khazanah Investment Institute report said that residential properties in Kuala Lumpur are at the very non-affordable level, with most properties priced above RM490,000, followed by Selangor at an average property price of RM300,000 as compared to market price of RM223,704,” he said at a sales and marketing conference organised by the Real Estate and Housing Developers' Association Malaysia (Rehda) Institute here today.
According to the real estate research firm CBRE WTW, a total of 24,738 completed units of residential properties were unsold last year, with 38.4 per cent or 9,499 units comprised of condominium and apartment units.
Based on price breaks, 22.7 per cent of houses priced between RM500,000 and RM1 million, involving a value of RM3.54 billion, dominated the excess in unsold property units.
Foo said based on the average population growth of 2017 which is 390,000, the country needs 97,500 residential units per year. However, the number of completed residential homes last year was 94,198 units.
He said lack of facilities and infrastructure as well as connectivity and access also caused a slight decrease in sales of residential units.
“This includes Kedah with 3,783 unsold units followed by Selangor with 3,713 units and Kuala Lumpur (929 units)," he said.
Meanwhile, he said the supply of studio units or small office home offices (SOHO) which were “as wide as shoe boxes” were also identified as not suitable for families in big cities.
“Unrealistic and non-ideal sizes of property for long term stay, as well as poor construction quality affect the quality of life in general,” he said.
He said developers should study and relook at the residential segment which is attracting potential homebuyers rather than merely considering about their own profitability.
He said property developers need to adjust residential pricing with market demand.