KUALA LUMPUR, Jan 31 2019 : The initiatives by the government to tackle the problem of property overhang and promote home ownership have been lauded and supported by many, although some feel that houses remain largely unaffordable, according to market watchers.
For instance, the launch of the RM1 billion fund for affordable homes to help house buyers from the lower income group nationwide is most welcomed though some expect it to have minimal impact in assisting home ownership.
Kenanga Reseach in its recent note said that the effort would have minimal to zero impact on houses built by private property developers.
With the official launch of the RM1 billion fund by Bank Negara Malaysia (BNM), first-time house buyers are expected to enjoy 23 per cent less in monthly commitment compared to current financing schemes offered in the market.
“However, we opine that the lower financing scheme has minimal to zero effect on private developments undertaken by listed developers given that most of their products are priced above RM150,000,” it said.
Last year, BNM in its report stated that Malaysia faced a shortage of affordable houses for the masses and the data showed that houses were “seriously unaffordable” in 2016 by international standards.
The central bank estimated the maximum affordable house price to be RM282,000, based on the housing cost burden approach, but the actual median house price was RM313,000.
According to the Valuation and Property Services Department, unsold completed residential units rose to 30,115 units as at Sept 30, 2018, an increase of 48.35 per cent from the 20,304 units a year ago.
The total value was RM19.54 billion, up 56.44 per cent from RM12.49 billion in the previous year.
However, if serviced apartments and small offices home offices were included, the overhang would reach 40,916 units valued at RM27.38 billion.
Meanwhile, PropertyGuru Country Manager Sheldon Fernandez said the oversupply in the property market was largely evident for higher-end houses, both landed and high-rise, though more focused on condominiums and apartments.
He added that affordability remained a major hurdle and based on its survey, 92 per cent of Malaysians wanted to own their own home.
“That being said, the BNM Fund for affordable homes mainly addresses homes within the RM150,000 range. However, according to PropertyGuru’s research, many are searching for houses below the RM300,000 price bracket,” he said.
According to the PropertyGuru Market Index, Fernandez said the market was in an oversupply situation at key state areas as prices of the newly launched houses did not match the mass income level.
“The issue of wage stagnation against rising property prices is a serious matter and one that will require a macro-economic solution,” he said.
The 2018 PropertyGuru Market Index too had pointed to an oversupply in the market with asking prices continuing to show a 2.3 per cent drop year-on-year.
“We have always emphasised that lower interest rates would greatly alleviate the financing and repayment capabilities of Malaysians, and it is great to see it being reflected in the fund at 3.5 per cent per annum.
“We await to see more strategic initiatives from the government on this, and we support the initiative by the government in terms of both private and public working hand-in-hand to address the affordability issue in Malaysia,” he said. – Bernama