KUALA LUMPUR: Properties priced between RM500,001 and RM700,000 make up the second largest category, or 15 per cent of all the overhang units in Klang Valley, according to Tan Ka Leong, group managing director of CBRE | WTW Malaysia.
The biggest number of overhang units, at 28 per cent, are those priced at RM1 million and above, according to him.
"I think a lot of developers are looking at a price bracket of about RM500,000 to RM700,000 and thinking it's a sellable product, but the statistics don't really tell that story," he said.
"So, developers, when you plan for the pricing of the product, I think we need more in-depth studies as to what actually contributed to this," he said.
According to Tan, there was a 5.0 per cent overall increase in the compound annual growth rate (CAGR) for the supply of residential properties in the Klang Valley between 2018 and the third quarter of 2023 (3Q2023).
At 8.0 per cent compared to 2.0 per cent, the CAGR of non-landed properties (serviced apartments, apartments, condominiums, and single-family homes) outpaced that of landed homes (terraced houses, semi-detached, detached, and cluster homes).
Tan said that people are more accepting of non-landed living because of the scarcity and affordability of land.
Regarding the volume and value of residential transactions in the Klang Valley, the number of landed transactions fell by 3.0 per cent to 9,916 units on a year-over-year (y-o-y) basis.
The volume of non-landed transactions rose by 11 per cent to 6,957 units y-o-y.
The value of transactions increased for both landed transactions by 2.0 per cent to RM7.71 billion and non-landed transactions by 22 per cent RM4.29 billion.
However, he said that Malaysia's total overhang property count is declining.
Overhang in the Klang Valley fell by 12 per cent y-o-y due to rising demand and changes in the market.
Tan said that a positive trend is suggested by the decrease in overhang units from 2022 to 2023.
In the Klang Valley, landed properties that consist of terraced, semi-detached, detached, and cluster homes make up approximately 7.0 per cent of overhanging properties.
According to Tan, a few catalysts will help the market go forward in 2024. These include Budget 2024's proposed relaxation of the Malaysia My Second Home requirements and an increase in funding from RM5 billion to RM10 billion for Skim Jaminan Kredit Perumahan, which will assist about 40,000 borrowers.
He added that owner-occupiers looking for reasonably priced properties in prime locations will be the ones driving growth.
Regarding the other property market segments, Tan said that as more businesses go through the flight-to-green process in order to increase the agility of their portfolio, there is an increasing demand for prime building office space that is certified green.
He thinks that building owners will continue to have to give tenants more leeway when it comes to size, arrangement, and terms of the lease.
Tan therefore predicts that although rental prices will stay the same, there will be an increase in office supply and vacancy rates due to an influx of new supply, which will cause the gap between purpose-built office buildings that are older and those that are newer to widen.
Regarding retailers, he thinks they will start utilising retail space for a variety of purposes in order to accommodate omnichannel shopping experiences, which include online, in-store, and mobile.
Tan anticipates that concept stores for goods, services, and experiences will stay popular.