PETALING JAYA (Jan 21): While the property overhang in Malaysia has been on an upward trend, it is not an "economic calamity", according to property consultancy Rahim & Co International Sdn Bhd as it expects the number to be reduced over the next few years.
At a press conference today, executive chairman Tan Sri Abdul Rahim Abdul Rahman (pictured) said there are 50,008 residential overhang units including pure residential houses, serviced apartments and Small Office Home Offices (SoHos) worth some RM34 billion in the country as at the third quarter of last year (3Q2019).
Johor has the highest number of overhang units at 18,517 followed by Selangor with 7,226 units and Kuala Lumpur with 5,170.
“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 explained.
He added that the overhang was a result of a lack of proper research before new projects are developed.
“Developers lacked proper research on the demand, pricing and cost structure before they embarked on new projects,” said Abdul Rahim, adding that gone were the days when there was an undersupply of housing stock.
He also hopes that the government will not bail out any developer who faces problems due to their unsold stock.
Meanwhile, he expects the property market to remain challenging this year with a moderate recovery.
“But it is not all doom and gloom because of the 50,000 overhang units. The outlook for the property sector is expected to be segmented according to asset classes and opportunities are still out there for those who seek,” he concluded.