Completed and unsold properties are a nightmare for many developers. I say many because there are developers who continue to build and complete and handover the keys even though the total units sold are just half. The reason is because they are also supported by their other businesses and thus could afford to continue paying maintenance fees for the units they own while their sales team continue to sell those units over time. Nevertheless, a high number of unsold units is negative news and may usually push some potential buyers into the wait-and-see mode. Never mind that some of these potential buyers already found the unit they want which is near their office for example. The ‘What Ifs’ are in the brain and it’s hard to shake it off. I think many potential buyers in Johor may have this issue.
Article in thestar.com.my here. Johor State Housing, Communications and Multimedia Committee chairman Dzulkefly Ahmad said that Johor has the highest number of unsold properties in Malaysia and that the combined value of these units is slightly over RM4 billion. 60% of all these units are RM500,000 or higher. (Well, this explains a lot…) Dzulkefly also mentioned the numbers of other states too. He said Perak was in second spot with 5,357 units (RM1.632bil), followed by Selangor, 4,693 units (RM4.2bil); Penang, 3,502 units (RM3.088bil) and Kedah, 3,311 units (RM889.54mil). Here’s an earlier article about the state of the Penang property market unsold units. He then added, “Developers need to analyse the current property market in the state before building to reduce the overhang.” Beyond the developers, Dzulkefly said the state government, through its Housing Secretariat, would focus on finding ways to ensure that unsold completed residential units under the Johor Affordable Homes would be sold immediatelyArticle in thestar.com.my here.
There are a few ways to push the sale of these unsold units. The first may be to ask developers to give as much incentives as they could. I believe the developers are already doing this on their own initiative. The second one may be to speak to the banks to be more objective in lending to people who may not have the record showing they could pay but actually have enough income to pay for the monthly mortgages. Actually, the most important one would be to have a catalyst to more demand.
A very good example may be to attract more MNCs to locate some parts of their operations in Singapore over to JB for example. Attracting the Singaporean SMEs looking to expand into the ASEAN market will also be another potential catalyst. There are a total of 180,000 SMEs in Singapore, as per a report by UOB here. More jobs equal to higher demand for housing. Last but not least will be connectivity. Here’s it’s the Rail Transit System. Hopefully, Dzulkefly could study the potential benefits on what could better connectivity bring to the property market dynamics too. Happy understanding.