Unsold properties in Malaysia? I think everyone we ask will tell us about the seriousness of unsold units. Then, some will say that they intend to wait for price to drop before buying since the market outlook is negative. Upon asking about the level of price drop which will compel them to buy and many would now return a blank look. They do not know how low is low or at what price level they will enter into the market.
Of course, with the bank approving their loan applications too. Just note that I would personally prefer to hold and rent out my unit versus selling it if I do not get the price I wanted. I do think majority of all owners will think like me; not selling below the price they bought many years ago. Perhaps that’s why even based on the latest Malaysian House Price Index, the price is still… UP. Look below: (1.3% is positive yeah, not negative indicating a drop)
Now let’s listen to a real estate prominent personality about the state of overhang. Article in edgeprop.my Property consultancy Rahim & Co International Sdn Bhd executive chairman Tan Sri Abdul Rahim Abdul Rahman said, “In my opinion, it is not an economic calamity and we should not be overly concerned to the extent of having to set up a special body just to acquire these units given that developers are now reducing their prices [to try and sell them off].” He expects the number to be reduced over the next few years.
He added, “Developers lacked proper research on the demand, pricing and cost structure before they embarked on new projects.” He is also of the opinion that the government should not bail out any developer facing problems with their unsold stock. His personal conclusion is that there are still opportunities in the property market for those who seek them out. He expects 2020 to be a challenging year for property market but with a moderate recovery. Please read full Article in edgeprop.my
I am happy to say that I agree with him and that I have written indirectly many times about the opportunities in the property market. Just have to note that the lowest prices for buyers do not happen during a boom and the highest prices for buyers meanwhile usually happen in a booming property market. As for the overhang, this article was written much earlier on my view: You viewed, You hated, now discounted.
It’s a mismatch mostly for the property built versus the demand from buyers. As for the new supply, just look at most developers. Their one major focus? Affordability. They are adjusting either the distance or the size to ensure most of what they built could be easily absorbed by most households versus the RM700k or higher just a few years ago. Happy understanding yeah. Oh yeah, Waiting for a property which everyone likes will take a long time
Next suggested article: Demand and Supply is never perfect. It’s about demand and money