I would not want the government to encourage everyone who should not (due to their current financial capability) to buy a property. Seriously, if these people default, who will bear the consequences? The buyers who could afford and is now paying their mortgages consistently? When many people default, the property prices will be under pressure. Again, who will bear the brunt of these price fluctuations?
This is why I disagree that the issue with the current property market is simply down to financing. It’s much more than that. There’s a mismatch in property being built and what locals could afford or want. However, the state government must play an important role a vibrant market will benefit the state too. When sentiments are bad, it will be bad everywhere. Who wants to keep listening and reading about property overhang and unsold units? Does it not make everyone scared to step into their first property purchase?
Article in edgeprop.my here. There are RM14.4 billion worth of properties unsold in Johor. A solution is needed. Johor branch of Real Estate and Housing Developers’ Association (REHDA) chairman Datuk Steve Chong Yoon On said, “The building and development industry is the fourth largest economic driver in Malaysia. The industry is stimulating around 120 other trades. What we are concerned about is that the authorities and the stakeholders are not holding hands to come up with a solution to the problem.”
Iskandar Regional Development Authority CEO Datuk Ismail Ibrahim told the publication “he is concerned about the situation”. He has shared that he has been talking to stakeholders such as the Johor government and property developers about ways to revive the property market. He said, “For now, we are actually working with specific groups of developers to perhaps revisit the units that have been built, with the possibility of breaking them down.”
Explaining further, he said, “Let’s say, a unit of say 1,000 sq ft, they are selling at RM600,000. It is beyond the affordability of most people. What if the unit is broken into two units of 500 sq ft each? It might not meet the policy [requirement] of the day because the policy says it (a house) has to be no less than 700 sq ft, for instance. But these are modern types of units. At 500 sq ft, you have all the facilities and the younger generation does not need big houses.”
Rehda Johor hopes that the state authorities could relax the bumiputera release mechanism and quota system for properties. Chong said a study by Universiti Teknologi Malaysia has revealed that only 20% of the bumiputera units in Johor have been purchased. Chong said, “We are not questioning the bumiputera privilege, but we are saying that there is room for improvement in the release mechanism. If developers get to sell more properties and earn more profits, we pay more taxes to the government, so everyone is happy.” There are also more suggestions. Do read the Article in edgeprop.my here.
I think the suggestions do make sense. All stakeholders should have their say but it should not be monopolised by any one particular party yeah. As for the suggestion of ‘halving’ the units’ size, perhaps a survey could also be done to understand if there are really that many takers when the units are made smaller and more affordable. Lets not have a situation of even MORE units of unsold properties. Bumiputera release mechanism must be as transparently decided as possible and should be applicable to all developers. Lets not have situations where potential for favouritism may come into play yeah. All the best yeah JB property market.
Next suggested article: Impossible to afforda a property? Never.