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Unsold units? Rent them out perhaps?

I am a believer of renting first and buy later if one does not have enough ‘financial power’ yet. Well, perhaps not at the current property prices vs median household income anyway. I agree prices have ran too fast but I also disagree that developers are fully at fault for property prices. Seriously, it’s a demand and supply situation and it was also due to the ‘booming’ years of 2008 – 2012 when the prices were running up like horses. Every launch was for ever ‘better’ specs and higher prices. Guess what, when prices did go up, it will only come down if those buyers could not support the prices they bought and sold it lower. The question is always, could these buyers hold on or will they be forced to sell at a lower prices in the future.

Article in TheEdgeMarkets.com here The National House Buyers’ Association (HBA) secretary-general Datuk Chang Kim Loong has come up with a suggestion to fix the overhang problem of residential properties in the affordable pricing range: rent them out. He said that property developers and the authorities should consider renting out some of these affordably priced units to low income earners who need a roof over their heads. He said that there is insufficient information on houses priced below RM150,000 for the low income homebuyers with Bank Negara Malaysia offering special interest rate for them. Perhaps a website where the public could access information on the location, types of property and selling prices. (I agree! Call a tender for a third party to do it if necessary.)

In terms of the newly launched National Housing Policy (DRN), Chang said it provides some direction on resolving current problems, but implementation and enforcement will be key to its success. He said, “For instance, the implementation of the build-then-sell (BTS) concept, which HBA has advocated for since 2006, is not in the priority list. The ministry promises to start the research on the concept this year but many studies and discussions have already been done over the years.” Article in TheEdgeMarkets.com here

Since it’s now 2019, we will just have to watch how the DRN unfolds. There’s that 100,000 affordable homes being promised by the end of 2019 as well. Will it affect the home prices with so many affordable units flooding the market? Briefly, I do not think so. Prices depend on many things and not going down simply because there are now by far more units. Else, we should have seen prices in Desa Parkcity falling because there are now many more high-rise units within the same development. Perhaps when the affordable units flood the market, the prices will not move too much for a few years. This will allow income to catch up. That would be good for many households such as those from B40 and M40. Happy following.

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written on 2 Feb 2019

Next suggested article: Rental as a determinant of property price. Sounds clearer

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of kopiandproperty.com 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. kopiandproperty.com is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

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