If I have a manufacturing plant, I will wait for firm orders before I start producing. This will be what I do even if everyone is telling me that there is a huge demand for what I produce or that what I produce is cheap enough for everyone. Seriously, if I were to produce first and it was really cheap, what happens if no one buys it? What happens if the demand is there but somehow people are still not buying?
Actually, some of our unsold units in the property market were also because of similar reasons. Some were not in the best locations even though the price was low. Some developers may not have done an effective study on whether demand was existing or not. Of course, there are also those who built units with specifications which the buyer did not think meets their expectations. All these will create an image in future buyers’ minds that these ‘affordable’ units are of suspect quality. Here’s one case which needs some intervention from the Minister of Housing and Local Government.
Article in edgeprop.my Minister of Housing and Local Government Zuraida Kamaruddin shared a recent project which was 90 percent complete for a total of 1,080 units. The total units on offer is 2,160 and it’s targeted at those who need a home with an affordable price tag. She said, “We do not know why the number of applicants is low, considering the fact that this is an area which is experiencing rapid growth and the cost is below RM300,000.”
Total applicants attracted were just 248. Zuraida said that she will be raising the matter with the Kelantan state government and will request for their assistance to publicise the homes among state government officers. The option which the ministry will be providing to Liziz Standaco will be either to continue the construction or to change the remaining unconstructed units into other types of affordable homes and offer them to the public. More information in the Article in edgeprop.my
I think moving forward, it’s super important to understand the demand before creating the supply. Registration of applications should be undertaken much earlier to gauge interest level before any official launch and the start of construction. Our current overhang number is already high enough to scare everyone, especially those thinking whether or not to buy a property for the very first time.
I do not know many people who bought affordable homes because they intend to flip… Thus, people who are buying these homes are aiming to stay and anyway, the reasons for the government to encourage these homes were also for buyers to stay instead of speculating. This meant that IF the units were not sellable, people are not looking at them as a good home sweet home. This has nothing to do with a slow property market for example. Happy understanding.
Next suggested article: HBA: To avoid unsold units, please stop building non-affordable units