Housing remains the best business in Malaysia — Saleh Mohammed

SEPTEMBER 29 — I can accept if they say the national debt is RM1 trillion after considering contingent liabilities. But to say the value of unsold units in the high-end housing market is now worth RM100 billion is something else. And to organise a house ownership campaign (HOC) campaign in China or Hong Kong to attract them to come and buy is another thing.

At the United Nations our prime minister is trying hard to correct the current world order but at home our data collection, dissemination and its quality do not seem to be in order 

When the national HOC was launched earlier in the year, with government support, 22,000 properties worth RM22.5 billion was advertised. Only 24% are affordable homes.

In January, The National Property Information Centre (Napic) published the Q3 2018 data which showed that the number of unsold houses in Malaysia had reached a new high of 30,115 worth RM19.54 c. But a property consulting firm reported at end-September 2018, Malaysia’s property overhang was 43,219 units worth RM29.47 billion (serviced apartments and SoHo units included).

More surprise is in store when Napic reported last week that the residential sub-sector overhang continued to increase with 32,810 units worth RM19.76 billion remained unsold.

The above shows the data is either not correct or not up-to-date when compared to RM100 billion. It gives a wrong impression on the current demand and supply situation and would severely affect policy decisions. How then could the government achieve its target of offering one million homes to Malaysians if basic historical data itself is not accurate?

There is no necessity for an HOC in China or Hong Kong. Let the private developers deal with problems of their own doing.

Developers insist that this was a specific market only where most locals cannot afford, left unsold for a long time and are relatively small. Meanwhile, 19,784 units have been sold by Rehda members under the HOC. This is a huge success by any measure — 90% of the units sold. Strangely, data on how many of these high-end homes were bought by foreigners are not available, though the Rehda said it was likely “small”.

Why then the need to go abroad and are houses built to cater for foreigners and not Malaysians? Is it maintaining profit margins at the expense of local buyers?

The Q1 filings with Bursa Malaysia showed developers are still making handsome profits yet calling for extension of the HOC. Their balance sheet remained healthy and some are eyeing more land in the Klang Valley. ‘Google’ check new property launches and we can see how many are affordable ones. The bigger ones are said to be hoarding large land banks.

Bank Negara Malaysia last year warned that the overhang in the high-end market was at a critical level, especially within the Klang Valley. There should be adequate controls in terms of what is being built and not leave it to the private sector to build at its own whims and fancies.

Is it time for a consolidation in the industry?

For too long, the construction industry has been said to be supporting the growth of around 140 other downstream industries and a sustained weak growth would have ripple effects on the economy.

Isn’t it time to have a critical look at this area and probably at the other end for the MACC to start visiting the various stakeholders?

What say you

*This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.

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