Bank Negara Malaysia’s research shows that homes needed to be sub-RM300,000 in order to be affordable to most Malaysians. In fact, they have suggested some strategies which I wrote earlier too. Bank Negara’s 6 policy options. I like them all The oversupply situation is well, still high currently and usually due to the prices which are not considered that affordable when compared to the median household income today. A question of whether the prices will become affordable in the future? Well, ss long as the prices do not increase while the median income continues its upward progress, it may become affordable in the near future. Remember yeah, a RM200 increment is already equivalent to ability to pay for a property which is RM40,000 more expensive. (Technically lah… I know when we receive RM200 increment, we also have other things to buy.)
As for the new launches in the market, the proportion of residential properties launched in the price range of RM500,000 and below experienced a jump to 65 per cent of total launches in the first half of this year (H1 2018) compared with 52 per cent in the second half of 2017, according to a Real Estate and Housing Developers’ Association Malaysia (Rehda) survey. The full article in TheStar.com.my here. A good news is this: sales performance grew by 6.0 per cent, with 6,764 units being recorded sold. Two- and three-storey terrace houses took the lead with 2,858 units sold, mostly located in Sepang and Shah Alam, followed by apartments/condominiums (2,047 units) located mostly in Cheras and Segambut. Typical launching prices for Kuala Lumpur and Selangor is between RM500,001 to RM700,000 category.
In the survey, the “Top three suggestions from the respondents to encourage provision of affordable housing were reduction of development charges, lower land conversion premium and exemption of capital contribution.” Majority of developers in the survey said they have up to 30 per cent unsold stock. Three major reasons for borrowers unable to get loans include, “Contributing factors to the financing issue include lower margin of financing offered, ineligibility due to buyers’ income and adverse credit history,” he added. Please refer to the full article for reference in TheStar here.
By the way, if the survey is true and the developers mostly have 30 percent of unsold stocks or lower, this is considered positive. It meant that their launches are still mostly, affordable to the buyers. Imagine if they tell you that for every new project, their unsold units are 50 percent or higher. That would be disastrous. Happy following the journey of affordable homes. (Hint… I am still waiting for our Minister of Housing and Local Government’s grand plans for the property market)
written on 12th Oct 2018
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