Malaysia remains saddled with a massive property overhang four years after the market nose dived as billions of units remain idle in the market today.
It is estimated that 43,219 residential units worth RM29.7 billion remain unsold nationwide for the third quarter of 2018 (3Q18).
The situation in the near term remains bleak as there are more than 500,000 units in incoming housing supply, and that would take years for the market to absorb.
Housing prices in the country have consequently been on a moderating trend, registering at an average of RM401,900 in 2Q18 — a comparatively low 1.7% year-on year (YoY) increase.
The commercial space is also bracing for some 18 million sq ft to 20 million sq ft in incoming supply which will put pressure on occupancy and rental rates in an already soft market segment.
Developers eager to gain profit from the positive buyer sentiment, easing lending rates and rising household debt would culminate in the oversupply situation today where the bulk of properties in the market either exceed buyers’ purchasing power or demands.
The glut is unlikely to be resolved in the next one to two years as business and consumer sentiments, while improving, remain below the desirable thresholds and as the market gradually readjusts.
Media Title: The Malaysian Reserve
Date: 25 Feb 2019