The number of unsold units in Malaysia is at a historic high actually. An article about this earlier. Unsold units are u further 16k units. Now at 146k. From my conversations with many prominent property experts, the conclusion is a brief one. The demand is there but the price is just not right, yet. In fact, even the sentiment factor which was a negative is now a positive one after Malaysia voted in a new government just over a month ago. So, what else can happen? Well, in Hong Kong, the demand is also huge despite prices being extremely high. However, NOT ALL the units were sold and some developers continue to hold their price firm and thus continue to hold the units which were unsold.
The Hong Kong government will soon tax developers with unsold units soon. Here’s that news in SCMP.com – Hong Kong developers rush to sell empty flats ahead of new vacancy tax. Is this a good news for the potential buyers? Perhaps they may be able to buy cheaper units because the developer would have to balance between the amount being taxed versus selling with some discounts instead? The article shared that a few developers were looking to sell their unsold units soon. New World Development will release the last 38 homes in phase one of its Park Villa project in Yuen Long at discounted prices on Saturday. The discounts were said to be 18 percent. The units have been empty for the past 5 years. Sun Hung Kai Properties (SHKP) plans to clear its stock of 350 empty apartments at Grand Yoho phase two. Grand Yoho was completed in mid-2017. Hong Kong’s Chief Executive Carrie Lam Cheng Yuet-ngor made it clear that flats should be occupied for residence, instead of stockpiling. However this tax would only be implemented after a comprehensive public study and public consultations. Here’s that full article in SCMP for reference. (I think she is acting on behalf of many Hong Kongers needing a home but could not afford one yet.)
Nearer to home, Singapore has always been ‘encouraging’ the developers not to hold unsold units through the Qualifying Certificate (QC) extension charges. This can be pretty high yeah. In 2017, the developers in Singapore paid S$50 million for QC extension charges. Here’s that article in StraitsTimes. I think this pro-active measure has ensured that the number of unsold units do not balloon and the developers are much more serious with their development plans. Last but least would be developers pricing their units more closer to what the market could afford instead of the usual sentiment based pricing; good market means higher price and bad market means lots of rebates for example. From these two advanced property markets, what do you think may potentially also happen to Malaysia? Well, we are a follower when it comes to the property market and our unsold units are rising actually. Happy following.
written on 21 June 2018
next suggested article: Singapore private home prices in 2030, population, prices and size.