The term “property overhang”
means a new unit that has remained unsold nine months after its
launch. According to the latest Property Overhang (Quarter 2, 2002)
report released by the National Property Information Centre
Valuation and Property Department the Malaysian property market had
recorded an overall increase in unsold units in all sectors except
for shopping complexes.
The most affected sector was the residential market where almost
half of such units launched for sale last year still remained unsold
at the end of 2002. This had caused an increase in property overhang
that rose from RM27bil. in 2001 to RM29.15bil in 2002. Of the total
150,406 units launched for sale, only 82,198 units or 54.7% were
sold. Most of those unsold were mostly high end residential units
costing over RM200,00.00 that consisted of two and three-storey
terrace houses and condominiums.
In view of the overhang, the Second Finance Minister, Datuk
Jamaludin Jarjis had advised developers to understand the buyers’
needs by meeting demands with the suitable supply and not by
flooding the market with properties that consumers did not want. For
example, since most of the unsold units were high end residential,
developers should focus more on the medium and low cost housing
categories. They should also adopt effective marketing strategies,
propose innovative concepts in their projects and offer more
attractive packages to potential buyers.
Statistically, overhang of residential units had been getting worse
and precautionary measures must be taken before it led to a property
glut. In Q3, the value of such unsold units was RM6.89bil and by the
Q4, it had increased by 14.1% to RM7.88bil. In quantity terms, there
were 54,265 units in Q3 and 59,750 units in Q4, a 10.1% increase.
Geographically, the states of Johor, Selangor and Negeri Sembilan
registered the highest number of unsold units. At the end of 2002,
Johor had 16,872 unsold units followed by 9,640 units in Selangor
and 6,263 units in Negeri Sembilan.
As for the rest of the
property market, the sale of shop units recorded a mixed
performance. There was an increase in unsold units in Pahang, Kuala
Lumpur and Sarawak while Malacca, Perlis, Terengganu, Negeri
Sembilan and Perak recorded a decrease. The bulk of unsold units was
made up of 21/2-storey units.
Meanwhile, the office space market also suffered an increase in
overhang throughout the country. The vacancy for purpose-built
office increased to 2.76mil. sq. metres in Q4 from 2.75mil. sq.
metres in Q3.
The only sector that reported a positive performance was the
shopping complexes – an improvement of four percent to RM7.57bil. in
Q4 compared to RM7.89bil. in Q3.