KUALA LUMPUR – The high-end property market remains in a glut as 80% of new launches in the first quarter this year were units priced above RM250,000, which are considered affordable to only 58% of Malaysian households.
Second Finance Minister Datuk Seri Johari Abdul Ghani said the oversupply of higher-end properties puts 83% of the unsold units in the RM250,000 and above price segment.
“As compared to the first quarter of 2012, there were 54,000 unsold houses, with high-end properties making up around 19,000. But currently, out of 130,000 unsold units, 108,000 were high-end properties,” he told reporters on the sidelines of the 20th National Housing and Property Summit 2017 in Kuala Lumpur on Friday.
He said only 24% of new offerings fell into affordable housing category compared to demand for 42%.
“Prevailing median house prices is beyond the reach of most Malaysians, primarily attributable to a gross mismatch between housing supply and demand amid diverging expectations between households and developers,” he added.
On another note, Johari said financing continued to go towards properties priced below RM250,000, making up 56% of the total loans outstanding, while loans for houses priced between RM250,000 and RM500,000 accounted for 25%.
“About 72% of housing loan borrowers in 2016 were first-time buyers,” he said.
In the first quarter this year, the overall housing loan approval rate remained high at 74.2%.
“Banks had approved a total of RM22.3 billion of house financing to 93,137 borrowers,” he added.
On Rental Law, Johari said he would discuss with the domestic trade, oo-operatives and consumerism, and urban wellbeing, housing and local government ministries to introduce proper regulations for rented properties.
He said Malaysia could take the example from the United Kingdom which had regulations on rented properties that protected the tenants and landlords, as well as database of tenants and landlords.
“In the UK, there are laws protecting the tenants and landlords, so the landlords can’t abuse their position as landlords and tenants can’t misuse or damage the property, and they have a database on the tenants and landlords,” he said.
He added that the availability of such database would also make it cheaper for both parties if disputes arose.