40pct drop in property overhang after Madani govt takeover: Nga

 

Housing and Local Government Minister Nga Kor Ming revealed that about 13,066 overhang residential units have been sold since the coalition government took charge.

At the launch of the Real Estate and Housing Developers’ Association (Rehda) Institute’s affordable housing report, Nga noted that under the Madani government’s leadership, the number of unsold properties decreased from 37,066 units to less than 24,000 units, marking a significant improvement of over 40 percent.

Property overhang refers to properties that remain unsold nine months after their launch.

“Since the Madani government took over, our property overhang has dropped from 37,066 units to less than 24,000 units, a huge and significant improvement of more than 40 percent,” he said in his keynote speech during today’s launch.

Nga also mentioned Malaysia’s attractiveness to expatriates, citing a more than 50 percent increase in work permits issued to high-skilled expatriates from 2022 to 2023.

“This is a strong indication that the influx of foreign direct investment has created more skilled job opportunities,” he added.

Therefore, for 2024, Nga expressed confidence in the property market’s steady performance, which he believes will contribute positively to the gross domestic product (GDP).

“Many stocks in (the) property sectors have experienced good appreciation. Some property counters have seen an appreciation of more than 600 percent in the last 12 months,” he said.

Key housing issues

Nga highlighted the property market’s recovery, citing 399,000 property transactions worth RM200 billion recorded in the previous year.

Rehda’s report identified four key issues affecting housing affordability in Malaysia:

• The affordability measures adopted cause the imbalance between supply and demand.

• Changing demographic profiles are not recognised in determining the affordability of the public.

• Cross-subsidisation results in price distortion.

• Overlap in federal and state government initiatives.

To address these issues, the report suggested using the median multiple method with different multipliers based on location and housing cost burden until integrating the residual income approach into policymaking is feasible.

It also suggested collaboration between the public and private sectors to reduce the affordability gap and ensure transparent decision-making.

Additionally, developers should not face conditions on affordable housing, and market forces should dictate prices freely.

Lastly, the report proposed establishing a centralised online platform for easy access to social and public housing information, ensuring that benefits reach the intended recipients.