WITH the supply of overhang residential properties standing at close to RM20 billion, Putrajaya’s proposal to sell unsold units to foreigners under the Malaysia My Second Home (MM2H) programme will help offload some of the stock from the market which is under pressure because of new developments, said an economist.
If there is an uptake from Hong Kong buyers, it will reduce the overhang in the luxury home category, Socio-Economic Research Centre executive director Lee Heng Guie told The Malaysian Insight.
According to SERC’s data, there are more than 32,900 units of unsold residential property valued at RM19.96 billion as of the first quarter of this year.
Some 4,331 units are in the high-end category, priced above RM1 million. The unsold stock is valued at RM8.74 billion and accounted for about 13.1% of the total unsold units.
Lee said the government should not limit the scheme to luxury properties above RM1 million.
“Properties within the range of RM700,001 and RM800,000 should also be made available to potential buyers from foreign countries, especially Hong Kong.
“This will attract more people to buy properties here,” he said.
Such a move will also address the overhang problem in the mid-range segment, he said.
New developments are also adding pressure to the property market, he said.
As for the construction sector, growth has gone on a downward spiral, a year-on-year decline of 4.2% in 2018.
On that note, Lee said Putrajaya should take some mitigating measures to address the problem of oversupply, including reviewing the threshold for foreign purchasers, the real property gains tax and extending the home ownership campaign to December 31, 2020.
This will support the construction sector, which is closely tied to 140 sub-sectors. If growth weakens in the construction sector, the related sub-sectors are also affected, which impacts on the economy.
Properties within the range of RM300,001 to RM500,000 formed the bulk of the unsold stock with 8,337 units, followed by those priced from RM200,001 to RM300,000 with 7,506 units in the market.
There are 4,872 units of unsold homes in the mid-range bracket of between RM500,001 and RM700,001 with another 3,323 units between RM700,001 and RM1million.
As for the affordable category, there were 4,567 unsold units worth RM548.15 million.
According to the latest data released by the National Property Information Centre (Napic), there are 32,810 units of unsold residential properties worth RM19.76billion as of the first half of this year.
About 22.3% of the unsold stock are priced between RM200,001 and RM300,000. This was followed by the RM300,0001 and RM400,000 (17.5%) and more than RM1 million (12.8%) categories.
The Housing and Local Government Ministry is working with the Home Ministry and Tourism, Arts and Culture Ministry to review and improve the packages available under the MM2H programme.
Minister Zuraida Kamaruddin suggested allowing China and Hong Kong nationals to buy unsold high-end properties.
However, the scheme won’t be limited to buyers from Hong Kong and China.