KUALA LUMPUR, Oct 17 — Malaysia’s property market is expected to improve following moves to address a chronic oversupply, said a developers group.
The Malaysian property sector is facing a severe glut due largely to a surfeit of luxury homes that are beyond what most local buyers can afford, leading to an overhang worth RM19.7 billion that required government intervention in Budget 2020.
Developers said they have also scaled back new launches in response. Bloomberg reported that official data showed the number of completed units fell by a third in the first half compared to the same period last year while new projects slid by 20 per cent
“The market will level up in the next two years,” Soam Heng Choon, president at the Real Estate and Housing Developers’ Association (Rehda), told Bloomberg.
“The number of available units has dropped due to the ‘self-discipline’ of developers and the sales campaigns,” he added.
Finance Minister Lim Guan Eng announced that the National Home Ownership Campaign 2019 has extended for another six months to 31st December 2019.
Lim said the extension was to encourage an increase of Malaysian home ownership and reduce unsold houses. Stamp duty exemption for first-time home buyers has also been extended to the same period.
Lim also announced they will lower the threshold on unsold high-rise property prices in urban areas for foreign ownership from RM1 million to RM600,000 in 2020 which also includes support for rent-to-own programs and state guarantees to lower mortgage rates.
Homes worth RM19.7 billion remained unsold in the first six months, a 0.5 per cent drop from a year earlier, while transaction value has rebounded, rising 9.5 per cent.
Home prices remain muted, with the average cost of a house easing in the second quarter to RM420,345, the lowest level in a year, Bloomberg reported.