There’s this debate on whether the lowering of floor price for foreigners will cause the locals to lose the chance to buy these high-rise overhang units. Perhaps we understand a little bit on the term overhang since this RM600,000 thingy is going to affect only these overhang units. It will NOT be for new units. Not for newly completed units which remain unsold. It’s definitely not for in progress or about to start building units too. Overhang units meant that unit remains unsold and still under the developer and it has remained unsold for 9 month or higher from the day of handover.
This is JPPH’s definition for overhang: JPPH defines an overhang as completed unsold units nine months after launching, and after the issuance of the certificate of fitness by local authorities. This signify a dwelling is fit for occupation.
It meant that the local buyers could buy these units before the official launch which is quite common. The buyers could buy these units when it’s officially launched. The buyers could buy these units anytime within those 36 months of construction and the buyer could also buy the unit right after key handover. In fact if we were to ask the developers if they prefer to sell to the locals or the foreigners, no developer would prefer to sell to foreigners. There are much more hassle…
The potential buyer who’s a local could view the same unit for 1 month over and over again and then only decided to buy three months later. Even at this stage, the property is still not classified as overhang yet. This meant that the foreigners could not buy these units yet because they are allowed to only buy RM600,000 overhang high-rise units within urban centre. In this case, Kuala Lumpur. All in all local buyers have no less than 4 years I think to decide whether or not to buy that unit.
Actual units under this? Now we go into the actual number of units which will be available? There’s only 3,860 units available currently under the overhang category for the whole of Kuala Lumpur. Frankly, I believe it’s a very good number to start telling the foreigners to think of Kuala Lumpur properties. It’s also a very good number because it’s a small number. On a yearly basis, the total transactions for residential units in Malaysia is around 200,000. In other words, even if 100% of all these 3,860 units are sold to foreigners, this is just 2% in total and it’s just for one year. Happy understanding.
<Featured Image is courtesy of Stock Photos from jamesteohart>
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