Rahim & Co International Sdn Bhd expects the overall property market to improve moderately this year but warned there will be challenges, said its executive chairman Tan Sri Abdul Rahim Abdul Rahman.
Based on the Rahim & Co's Property Market Review 2019/2020 report launched here today, it showed there was growth in market activities for all major sectors last year.
“The market downturn was at its worst between 2013 and 2017 with percentage drops ranging between six per cent and 12 per cent for Malaysia’s total market activities. When comparing this bleak period with 2019’s positive number, there is a substantial hope for the property market to be back on track towards recovery albeit at a moderate pace," said Abdul Rahim.
On the existing supply of residential units for Malaysia, Abdul Rahim said there were about 5.69 million units by the third quarter of 2019 (3Q2019) after an increase of over 142,000 units year-on-year.
Of these numbers, unsold units remain a hot issue with the latest statistics as at 3Q2019 revealing a total of 31,092 residential overhang units worth RM18.96 billion.
"Looking at the overall dwelling-type properties which include serviced apartments and Soho (small office home office) to the pure residential units, the total overhang number amounts to 50,008 overhang units worth RM34 billion sitting idle in the market across Malaysia," said Abdul Rahim.
Amongst all states, Johor holds the highest count of overhang units at 18,517 units followed by Selangor at 7,226 units and Kuala Lumpur at 5,170 units.
Despite many developers giving discounts to sell off their unsold units, some people simply cannot afford to buy the properties, said Abdul Rahim.
He said some developers also failed to carry out sufficient research before embarking on a project, leading to the high number of overhang units.
Abdul Rahim hoped the government will not bail out the developers for not doing their homework.
To spur the property market whilst reducing the overhang burden, the Housing Ownership Campaign (HOC) 2019 ran for the whole year and had resulted in 31,415 housing units worth RM23.3 billion sold, as stated by the Housing and Local Government Minister.
Abdul Rahim said this includes the sales of new launches as well as units at various stages of construction including unsold overhang units.
"We hope a similar measure will be implemented in 2020 on top of the proposed incentives introduced in Budget 2020 to continue spurring the market," said Abdul Rahim.