With RM42bil homes unsold, overhang to remain high in 2021

 

Rahim & Co says there are no takers for more than 57,000 units of houses and apartments, particularly in Johor and the Klang Valley.

PETALING JAYA: The property overhang in Malaysia has continued on an upward trend, with consultant firm Rahim & Co International expecting the market to remain challenging for the rest of the year.

Its research director, Sulaiman Saheh, said 57,390 homes, serviced apartments and Soho (small office home office) units worth RM42.49 billion were left unsold as of the third quarter of last year.

He said the majority of the overhang units comprised non-landed property, mostly located in Johor and in the Klang Valley.

“Part of this increase was due to the movement control, which was a big factor because people could not travel to offices to sign documents and complete their transactions,” he said at Rahim & Co’s Property Market Review 2020/2021 virtual briefing today.

Sulaiman said housing affordability had also contributed to the overhang, as prices were relatively high compared to the average Malaysian annual household incomes.

Rahim & Co International founder and executive chairman Abdul Rahim Abdul Rahman said property consultants have found it difficult to “close the gap between the property prices the buyers and sellers want”, which has been widened by the pandemic.

Rahim expected the property market to see little progress in the coming months, even after the movement control order is lifted, as the number of daily cases are still high.

He said the effects of the pandemic would likely last for at least another year, or until a vaccine was made available to the general public.

Meanwhile, chief executive Siva Shanker pointed out that the vaccine was not a “silver bullet” for the property market’s struggles, as the oversupply of residential units and office spaces had existed long before the pandemic.

“These problems were not caused by the virus, so they will not be solved by the vaccine,” he said, adding that office vacancies had fallen in the 70% bracket, the lowest in a long time.

However, Siva said a successful national vaccination programme would likely raise buyer sentiments, which may carry forward to 2022 and allow the market to recover slightly. - FMT