It would have been easier to say that Malaysia’s unaffordable housing crisis is bad and just end it there. If only it were that simple, but it is not.
The severity of the unaffordable housing dilemma in Malaysia is perhaps best described in two words - it’s complicated.
The facts and figures
Last month, Bank Negara Malaysia (BNM) official described housing in Malaysia as being “severely unaffordable” in comparison to international standards. Based on the median multiple methodology, a house is considered affordable if the price is not more than three times the annual household income.
Assuming you are married and earning RM5,000 per month as a family, your annual household income is RM 60,000 and a house three times your annual income would be affordable if priced at RM180,000. BNM’s official says the maximum affordable house price is only RM 282,000 based on the ratio and median national incomes across the country.
With the majority of new home prices falling just within the limit or above the range of affordability, there is an excess supply of properties in the market. The National Property Information Center (NAPIC) provided various statistics in its report for the first half of 2019 and the gist of the oversupply issue is:
32,810 units of properties are overhang units (overhang units are new and completed properties not sold after 6 months).
43 % of overhang units are condominiums and apartments.
Of the overhang amount, Johor has the highest number of overhang units (18.8%), followed by Kuala Lumpur (14.9%), Perak (17.6%) and Selangor (12.9%).
Bulk of overhang units are priced at RM201,000 to RM300,000 (22.3%) followed by homes at RM300,001 to RM400,000 (17.5%), and homes above RM1 mil (12.8%).
Sunday, March 1, 2020
Wednesday, January 22, 2020
Rahim & Co: Don't be overly concerned with the overhang
While the property overhang in Malaysia has been on an upward trend, it is not an "economic calamity", according to property consultancy Rahim & Co International Sdn Bhd as it expects the number to be reduced over the next few years.
Executive chairman Tan Sri Abdul Rahim Abdul Rahman said there are 50,008 residential overhang units including pure residential houses, serviced apartments and Small Office Home Offices (SoHos) worth some RM34 billion in the country as at the third quarter of last year (3Q2019).
Johor has the highest number of overhang units at 18,517 followed by Selangor with 7,226 units and Kuala Lumpur with 5,170.
“In my opinion, it is not an economic calamity and we should not be overly concerned to the extent of having to set up a special body just to acquire these units given that developers are now reducing their prices [to try and sell them off],” he explained.
He added that the overhang was a result of a lack of proper research before new projects are developed.
“Developers lacked proper research on the demand, pricing and cost structure before they embarked on new projects,” said Abdul Rahim, adding that gone were the days when there was an undersupply of housing stock.
He also hopes that the government will not bail out any developer who faces problems due to their unsold stock.
Meanwhile, he expects the property market to remain challenging this year with a moderate recovery.
“But it is not all doom and gloom because of the 50,000 overhang units. The outlook for the property sector is expected to be segmented according to asset classes and opportunities are still out there for those who seek,” he concluded.
Executive chairman Tan Sri Abdul Rahim Abdul Rahman said there are 50,008 residential overhang units including pure residential houses, serviced apartments and Small Office Home Offices (SoHos) worth some RM34 billion in the country as at the third quarter of last year (3Q2019).
Johor has the highest number of overhang units at 18,517 followed by Selangor with 7,226 units and Kuala Lumpur with 5,170.
“In my opinion, it is not an economic calamity and we should not be overly concerned to the extent of having to set up a special body just to acquire these units given that developers are now reducing their prices [to try and sell them off],” he explained.
He added that the overhang was a result of a lack of proper research before new projects are developed.
“Developers lacked proper research on the demand, pricing and cost structure before they embarked on new projects,” said Abdul Rahim, adding that gone were the days when there was an undersupply of housing stock.
He also hopes that the government will not bail out any developer who faces problems due to their unsold stock.
Meanwhile, he expects the property market to remain challenging this year with a moderate recovery.
“But it is not all doom and gloom because of the 50,000 overhang units. The outlook for the property sector is expected to be segmented according to asset classes and opportunities are still out there for those who seek,” he concluded.
Tuesday, January 21, 2020
Residential overhang remains a concern
JPPH statistics showed the market have taken an upward turn with a positive growth of 6.4% year-on-year as at the third quarter 2019, an improvement from 2018’s 0.6% growth.
Value transactions held steady with a growth of 2.1%, bridging third quarter 2019’s overall number of 243,358 transactions to be worth RM102.9bil.
In reflecting back on the past decade, market downturn was at its worst between 2013 to 2017 with percentage drops ranging between 6% to 12% for Malaysia’s total market activities.
Being the largest market sector, the existing supply of residential units for Malaysia stood at about 5.69 million units by third quarter after an increase of more than 142,000 units year-on-year.
Unsold units remain a hot issue with the latest statistics as at third quarter revealing a total of 31,092 residential overhang units worth RM18.96 bil.
Looking at the overall dwelling-type properties which includes serviced apartments and SOHO units to the pure residential units, the total overhang number amounts to 50,008 overhang units wirth RM34bil sitting idle in the market.
Johor holds the highest count of overhang units at 18,517 units followed by Selangor at 7,226 units and Kuala Lumpur at 5,170 units.
In an effort to spur the property market whilst reducing the overhang burden, the Housing Ownership Campaign (HOC) 2019 ran for the whole year and had requested in 31,415 housing units worth RM23.3bil sold.
Friday, December 6, 2019
Property sector’s upside is capped by affordability issues
CGS-CIMB Equities Research believes the property sector’s upside is capped by affordability issues, slower gross domestic product (GDP) growth and weaker new property sales.
CGS-CIMB Research said as of 3Q19, total residential property transactions by value rose 2.1% yoy, according to National Property Information Centre (NAPIC) data.
Transaction value for residential units priced between RM150,000 and RM200,000 increased the most by c.13% yoy, followed by residential units priced between RM250,000 and RM300,000, while residential properties priced above RM1mil recorded a 16% yoy decline in transaction value.
“This proves that the demand for the more affordable properties is greater at the moment. Nonetheless, 3Q19 residential transaction value growth was slower vs. 2Q19’s 9.5% yoy,” it said.
CGS-CIMB Research said as of 3Q19, total residential property transactions by value rose 2.1% yoy, according to National Property Information Centre (NAPIC) data.
Transaction value for residential units priced between RM150,000 and RM200,000 increased the most by c.13% yoy, followed by residential units priced between RM250,000 and RM300,000, while residential properties priced above RM1mil recorded a 16% yoy decline in transaction value.
“This proves that the demand for the more affordable properties is greater at the moment. Nonetheless, 3Q19 residential transaction value growth was slower vs. 2Q19’s 9.5% yoy,” it said.
Sunday, November 24, 2019
Auction market sees more land and commercial properties
The oversupply situation in the property market in Malaysia is reflected in the foreclosure market. There has been a significant increase in the number of properties being put up for auction in the first three quarters of the year — a sign that the property owners are losing their holding power.
According to AuctionGuru.com.my’s 9M2019 Auction Report, a total of 26,563 properties worth RM14.3 billion went under the hammer within Jan-Sept 2019, an increase of 12% from 23,658 properties valued at RM10.9 billion (32% rise in terms of value) in 9M2018.
Notably, in the third quarter of this year alone, there were a total of 9,294 foreclosure properties, compared with 8,760 cases in 3Q2018.
The online auction listing platform’s executive director Gary Chia has observed that the number of auction properties has been increasing since 2016 with more high-value properties and land put up for auction.
“We are seeing a rising number of agricultural land and commercial properties in the auction market. This could be due to the current economic slowdown which has impacted business owners,” he tells EdgeProp.my.
He anticipates more properties coming onto the auction market in the foreseeable future amidst the near term headwinds expected in the domestic and external macro economy coupled with the overhang in the primary market.
Nevertheless, the proactive measure taken by the government — of reducing the floor price for foreign property purchase to RM600,000 — may potentially reduce the excess stock in the primary market.
This could, to a certain extent, limit the cascading effect onto the secondary market.
“We shall continue to monitor the foreclosure market closely as it serves as a crucial bellwether of the overall property market trend and well-being,” adds Chia.
Holding power being challenged
In 9M2019, there were 3,316 commercial properties (12% of 26,563 auction properties in 9M2019) and 1,051 land plots (4%) on auction.
The 3,316 foreclosure commercial properties has a total reserve value of RM4.26 billion, an increase of 27% in volume and 62% in value compared with 9M2018.
“This aggravated hike can be associated to the supply overhang situation which is engulfing the commercial sector, particularly the office space segment,” he notes.
In terms of value, office buildings registered the highest foreclosure value among the commercial properties totalling RM1.375 billion (34 cases), followed by shopoffices with a total estimated value of RM945 million (1,030 cases).
Although residential property takes the major share in terms of volume with 22,196 foreclosure cases, foreclosed commercial property contributed a significant amount in terms of value at RM4.3 billion, making up 30% of total reserve value.
Auction residential property in 9M2019 was valued at RM8.5 billion or 59%, while auction land assets value totalled RM1.6 billion or 11% of the total reserve value.
Chia says the auction market has also been slow as people are waiting for the reserve prices to come down.
A property that is not sold on first auction will see its reserve price drop by around 30% at the next auction.
Chia is concerned over the rise in land and commercial properties on auction as these are the least popular properties on the auction market especially in current market conditions where people prefer to keep cash for making big-ticket purchases.
“Land and commercial properties are refinance-able assets for business owners, to solve short-term cash flow problems. As the business environment gets tougher, business owners who refinanced their assets might have problems servicing their monthly loan repayments,” he says.
In the current anaemic economic environment, Chia expects more foreclosure commercial properties coming on stream in the remaining months of 2019.
Short-stay as a solution for owners
In the high-rise residential segment, the strong demand for short-stay accommodation has helped property owners generate extra income to cover their monthly loan instalments.
“It’s worth noting that the number of auctioned serviced apartments were the lowest among high-rise residential properties. This could be attributed to the proliferation of short-term rentals as owners turn their vacant properties into short-term rental accommodations,” Chia offers.
11,814 landed homes worth RM5.363 billion and 10,382 non-landed homes went under hammer in 9M2019. Under the non-landed segment, close to 50% of the total foreclosure cases were apartments (5,166 units) while there were 1,872 condominium and 1,629 serviced apartment units.
9,235 terraced houses came up for auction in 9M2019, followed by semi-D with 1,435 cases, bungalows with 752 units and 392 townhouses.
The high number of terraced houses could be a sign that middle-income earners are struggling to make ends meet as a majority of terraced house owners are from this group.
The depressed rental market is also affecting owners who purchased the units for rental investment, he adds.
According to AuctionGuru.com.my’s 9M2019 Auction Report, a total of 26,563 properties worth RM14.3 billion went under the hammer within Jan-Sept 2019, an increase of 12% from 23,658 properties valued at RM10.9 billion (32% rise in terms of value) in 9M2018.
Notably, in the third quarter of this year alone, there were a total of 9,294 foreclosure properties, compared with 8,760 cases in 3Q2018.
The online auction listing platform’s executive director Gary Chia has observed that the number of auction properties has been increasing since 2016 with more high-value properties and land put up for auction.
He anticipates more properties coming onto the auction market in the foreseeable future amidst the near term headwinds expected in the domestic and external macro economy coupled with the overhang in the primary market.
Nevertheless, the proactive measure taken by the government — of reducing the floor price for foreign property purchase to RM600,000 — may potentially reduce the excess stock in the primary market.
This could, to a certain extent, limit the cascading effect onto the secondary market.
“We shall continue to monitor the foreclosure market closely as it serves as a crucial bellwether of the overall property market trend and well-being,” adds Chia.
Holding power being challenged
In 9M2019, there were 3,316 commercial properties (12% of 26,563 auction properties in 9M2019) and 1,051 land plots (4%) on auction.
The 3,316 foreclosure commercial properties has a total reserve value of RM4.26 billion, an increase of 27% in volume and 62% in value compared with 9M2018.
“This aggravated hike can be associated to the supply overhang situation which is engulfing the commercial sector, particularly the office space segment,” he notes.
In terms of value, office buildings registered the highest foreclosure value among the commercial properties totalling RM1.375 billion (34 cases), followed by shopoffices with a total estimated value of RM945 million (1,030 cases).
Although residential property takes the major share in terms of volume with 22,196 foreclosure cases, foreclosed commercial property contributed a significant amount in terms of value at RM4.3 billion, making up 30% of total reserve value.
Chia says the auction market has also been slow as people are waiting for the reserve prices to come down.
A property that is not sold on first auction will see its reserve price drop by around 30% at the next auction.
Chia is concerned over the rise in land and commercial properties on auction as these are the least popular properties on the auction market especially in current market conditions where people prefer to keep cash for making big-ticket purchases.
“Land and commercial properties are refinance-able assets for business owners, to solve short-term cash flow problems. As the business environment gets tougher, business owners who refinanced their assets might have problems servicing their monthly loan repayments,” he says.
In the current anaemic economic environment, Chia expects more foreclosure commercial properties coming on stream in the remaining months of 2019.
Short-stay as a solution for owners
In the high-rise residential segment, the strong demand for short-stay accommodation has helped property owners generate extra income to cover their monthly loan instalments.
“It’s worth noting that the number of auctioned serviced apartments were the lowest among high-rise residential properties. This could be attributed to the proliferation of short-term rentals as owners turn their vacant properties into short-term rental accommodations,” Chia offers.
9,235 terraced houses came up for auction in 9M2019, followed by semi-D with 1,435 cases, bungalows with 752 units and 392 townhouses.
The high number of terraced houses could be a sign that middle-income earners are struggling to make ends meet as a majority of terraced house owners are from this group.
The depressed rental market is also affecting owners who purchased the units for rental investment, he adds.
Sunday, November 17, 2019
次季滞销房产5万2666栋
我国次季推介后9个月未出售的住宅房产共高达5万2666栋！
大马房产服务顾问Nawawi Tie Leung第3季房产报告显示，次季我国滞销的住宅房产数量按季增长10.9%至5万2666栋。
报告显示今年次季滞销的房产中，住宅房产共有3万2810栋、服务式公寓有1万8186栋，而小型办公家居单位（Soho）则有1670栋。滞销的房产主要为价格平均介于20万令吉至30万令吉的房产单位，占比高达22.3%。
Nawawi Tie Leung预计，今年底将会有更多公寓单位推出市场。但高端公寓价格目前已有下滑的趋势。
“这主要因为房产的平均入住率也已从去年次季的79.7%，下滑至今年第3季度的 77.6%。”
展望未来，Nawawi Tie Leung认为会有越来越多办公室出租和入住率承下滑压力。房东也会继续面临找不到房客的困境。
Friday, November 15, 2019
Residential property overhang in KL hit 52,666 units in 2Q2019
Residential property overhang — completed units that remain unsold nine months after launch — in Kuala Lumpur stood at 52,666 units in 2Q19.
This is a 10.9% increase from the overhang stock of 1Q19, says Nawawi Tie Leung Property Consultants in its 3Q19 report on the Malaysian capital’s real estate market.
The total overhang in 2Q19 is 32,810 residential units, 18,186 units of serviced apartments and 1,670 Soho units. The majority of the overhang units are priced between RM200,001 and RM300,000 and makes up 22.3% of the total overhang units.
For the remainder of the year, more condominium units are expected to be released into the market. In 3Q19, 2,514 units were added to the current stock after the completion of three high-rise projects. The bulk of the new supply came from 1,516 units of serviced apartments at EkoCheras, located outside the city centre at Jalan Cheras’ Mile 5. The other two completed projects are from Stonor 3 with 400 units and Aria KLCC with 598 units.
Meanwhile, prices and rents for high-end condos eased marginally by 0.8% and 2% q-o-q at RM1,028 and RM3.78 psf per month respectively.
In the office market, the total stock in Kuala Lumpur increased to 84.8 million sq ft in 3Q19, following the completion of The Exchange 106.
Average occupancy rate dropped to 77.6% in 3Q19 from 79.7% in 2Q19. Nawawi Tie attributes this to the “slower-than-expected take-up” at The Exchange 106.
The first batch of tenants are expected to move into The Exchange 106 by next month while the bulk of other tenants are expected to follow suit by March and April 2020.
In 3Q19, Kuala Lumpur’s office market was mainly driven by the expansion of serviced office/co-working space operators and tech firms such as Klook, Agoda and Fave. Expansion in the office market is expected to gather momentum as other major tech companies contemplate expanding their presence in Malaysia.
Currently, the serviced office and co-working space in KL is split between 51% and 49% in the Golden Triangle and KL Fringe respectively.
Serviced office provider IWG will be opening its first Spaces co-working branch at Platinum Sentral, its largest office space in Malaysia at 59,000 sq ft.
IWG is also rebranding its Regus Centre in Menara Prestige to come under its Spaces co-working brand.
After WeWork opened its first location at Equatorial Plaza, it will set up its second location in Kuala Lumpur’s fringe area at Mercu 2, KL Eco City. Standard Chartered Bank and Mcdermott have leased 100,000 sq ft and 60,000 sq ft respectively at WeWork Equatorial Plaza.
Co-working operator Found8 from Singapore also opened its first location at KL Sentral Station in 3Q19.
In 3Q19, rents in the Golden Triangle and KL Sentral remained flat at RM7.23 psf per month and RM7.10 psf per month respectively. New supply from The Exchange 106 is expected to further contribute to the supply glut.
Menara MIDF, located along Jalan Raja Chulan, was also put up for sale at a guide price between RM140 million and RM150 million.
Looking ahead, Nawawi Tie expects office rents and occupancy to remain under downward pressure while landlords could face the continuing challenge of securing new occupiers.
In the retail sector, the overall occupancy for shopping malls in Klang Valley for 3Q19 is estimated at 85.3%. Prime malls have continued to maintain occupancy rates of above 90%. However, the projected growth of retail sales for the year has been revised downwards to 4.4% from 4.9%.
After 18 months, Parkson Puchong at M Square Mall ceased operations when the department store failed to meet its sales targets. Prior to this, Parkson had operated at Suria KLCC mall for 20 years. The group currently operates 43 stores across Malaysia.
Fitness gym Babel took up 15,000 sq ft at Suria KLCC, leasing the rooftop space at Menara Ken TTDI.
Co-working space operators have also taken up retail spaces in malls. MyTown shopping centre welcomed co-working space operator Common Ground as its tenant in September, which is taking up 18,000 sq ft of retail space across two levels. Common Ground also operates its co-working spaces in other malls such as Citta Mall and Jaya One.
In July, Malaysian co-working space operator Worq launched its third branch at KL Gateway Mall. Since opening its first branch at shopping mall Glo Damansara in 2017, Worq has rapidly expanded to provide some 18,000 sq ft of work spaces.
This is a 10.9% increase from the overhang stock of 1Q19, says Nawawi Tie Leung Property Consultants in its 3Q19 report on the Malaysian capital’s real estate market.
The total overhang in 2Q19 is 32,810 residential units, 18,186 units of serviced apartments and 1,670 Soho units. The majority of the overhang units are priced between RM200,001 and RM300,000 and makes up 22.3% of the total overhang units.
For the remainder of the year, more condominium units are expected to be released into the market. In 3Q19, 2,514 units were added to the current stock after the completion of three high-rise projects. The bulk of the new supply came from 1,516 units of serviced apartments at EkoCheras, located outside the city centre at Jalan Cheras’ Mile 5. The other two completed projects are from Stonor 3 with 400 units and Aria KLCC with 598 units.
Meanwhile, prices and rents for high-end condos eased marginally by 0.8% and 2% q-o-q at RM1,028 and RM3.78 psf per month respectively.
In the office market, the total stock in Kuala Lumpur increased to 84.8 million sq ft in 3Q19, following the completion of The Exchange 106.
Average occupancy rate dropped to 77.6% in 3Q19 from 79.7% in 2Q19. Nawawi Tie attributes this to the “slower-than-expected take-up” at The Exchange 106.
The first batch of tenants are expected to move into The Exchange 106 by next month while the bulk of other tenants are expected to follow suit by March and April 2020.
In 3Q19, Kuala Lumpur’s office market was mainly driven by the expansion of serviced office/co-working space operators and tech firms such as Klook, Agoda and Fave. Expansion in the office market is expected to gather momentum as other major tech companies contemplate expanding their presence in Malaysia.
Currently, the serviced office and co-working space in KL is split between 51% and 49% in the Golden Triangle and KL Fringe respectively.
Serviced office provider IWG will be opening its first Spaces co-working branch at Platinum Sentral, its largest office space in Malaysia at 59,000 sq ft.
IWG is also rebranding its Regus Centre in Menara Prestige to come under its Spaces co-working brand.
After WeWork opened its first location at Equatorial Plaza, it will set up its second location in Kuala Lumpur’s fringe area at Mercu 2, KL Eco City. Standard Chartered Bank and Mcdermott have leased 100,000 sq ft and 60,000 sq ft respectively at WeWork Equatorial Plaza.
Co-working operator Found8 from Singapore also opened its first location at KL Sentral Station in 3Q19.
In 3Q19, rents in the Golden Triangle and KL Sentral remained flat at RM7.23 psf per month and RM7.10 psf per month respectively. New supply from The Exchange 106 is expected to further contribute to the supply glut.
Menara MIDF, located along Jalan Raja Chulan, was also put up for sale at a guide price between RM140 million and RM150 million.
Looking ahead, Nawawi Tie expects office rents and occupancy to remain under downward pressure while landlords could face the continuing challenge of securing new occupiers.
In the retail sector, the overall occupancy for shopping malls in Klang Valley for 3Q19 is estimated at 85.3%. Prime malls have continued to maintain occupancy rates of above 90%. However, the projected growth of retail sales for the year has been revised downwards to 4.4% from 4.9%.
After 18 months, Parkson Puchong at M Square Mall ceased operations when the department store failed to meet its sales targets. Prior to this, Parkson had operated at Suria KLCC mall for 20 years. The group currently operates 43 stores across Malaysia.
Fitness gym Babel took up 15,000 sq ft at Suria KLCC, leasing the rooftop space at Menara Ken TTDI.
Co-working space operators have also taken up retail spaces in malls. MyTown shopping centre welcomed co-working space operator Common Ground as its tenant in September, which is taking up 18,000 sq ft of retail space across two levels. Common Ground also operates its co-working spaces in other malls such as Citta Mall and Jaya One.
In July, Malaysian co-working space operator Worq launched its third branch at KL Gateway Mall. Since opening its first branch at shopping mall Glo Damansara in 2017, Worq has rapidly expanded to provide some 18,000 sq ft of work spaces.
Thursday, November 14, 2019
2019住宅房产交易额
大马房产市场今年杪总成交额预计将达到710亿3000万令吉，写下4年来最高水平，全年销量为20万4840单位。上述成交总额将比去年的687亿5000万令吉，增加22亿8000万令吉或3.32%。成交量比去年的19万7385个单位，增加7455单位或3.78%。
和2016年的20万3064单位相比，则是增加1776单位或0.87%。在今年预计710亿令吉3000万令吉的总成交额当中，二手房屋高占567亿6000万令吉或79.9%，其余21.1%来自新房屋（142亿7000万令吉）。
Saturday, November 9, 2019
West Coast Expressway
West Coast Expressway (WCE), a 233km highway connecting Banting in Selangor to Taiping, Perak.
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