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HBA: To reduce unsold units, stop building non-affordable ones.

National House Buyers Association (HBA) have some sharp comments recently. It said that developers need to stop classifying affordable homes as those priced from RM500,000 and below. HBA secretary-general Chang Kim Loong said, “The situation of unsold properties or ‘overhang’ is only going to get worse if those in the Real Estate and Housing Developers’ Association (Rehda) and other developers continue to build properties which are beyond the income levels of the majority of our people.” He said that there is currently a mismatch between house prices and salaries of consumers needing houses. (In brief, it’s either property prices too high or salaries still too low) Article about his views in here.

An earlier article about the state of unsold units in Malaysia Unsold up by another 10,000 units. Worry now?  Chang said housing developers needed to build more “really” affordable houses that cost between RM150,000 and RM300,000. He said that housing developers will have to either give ‘real discounts’ or they will have to wait until the economy picks up again. He said, “Instead of giving freebies like free legal fees, free stamp duties, free furniture, free two years’ maintenance charges, extra car park, or cash back guarantees, housing developers should give actual discounts off the sales price. As an example, actual sales price minus 20% off. They must also build the right product at the right place with the right pricing and the right numbers.”

Veteran property expert Ernest Cheong meanwhile predicted that unsold units would keep rising if prices kept increasing. In fact predicted the bankruptcy of 50 percent of developers in Malaysia if they could not sell their units to pay the banks. This situation is now similar to 1997 /1998 period where many developers going bankrupt due to same reason. He said developers have built too many properties which ordinary people could not afford and this is despite warnings from experts since several years back. Please refer to the full article in

If we look at the newer launches these days, prices do seem to be creeping lower. Perhaps this lower prices are still insufficient for the households to buy a unit yet. As for whether prices will suddenly drop, then it depends on the current owners too and not just the developers. An earlier article here. Also, when we look at home ownership, we need to also look at the secondary market and not just the new launches. One main reason buyers skip the secondary market is because they could not come up with the downpayment needed. Thus, perhaps the problem to be solved does not rest solely on the developers’ shoulders but buyers themselves too. Happy following.

written on 30 Dec 2018

Next suggested article: Houses become unaffordable when salary stays flat

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.


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