News: Don’t Blame Developers for Oversupply of Unsold Units

Jan 2, 2019

 

Melaka-based developer Anthony Adam Cho said criticism that property developers are partly to blame for the oversupply of unsold property is “absolutely not true”, reported Free Malaysia Today.

He explained that market conditions depended not only on local, but also on international sentiments, including the trade war between the United States and China, the slower global and local economy as well as the lower prices of commodities.

This means people are more cautious on how they spend their money, and did not necessarily indicate a lack of demand, he added.

Cho was commenting on a recent report in which Radzi Tajuddin, CEO of real estate portal Hartabumi, blamed developers for the glut of unsold property as many built with lack of understanding of market demand.

Based on the report, there were about RM19.54 billion in unsold units in 2017. At present, majority of the unsold properties are priced at RM500,000 and above per unit.

Melaka Real Estate and Housing Developers Association’s (Rehda) immediate past chairman, Cho noted that while there were buyers who were keen, they were unable to secure the loans or were waiting for prices to drop further.

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“The property market moves in a cycle, and like any cycle, there will be an oversupply of stock. The people still need houses, more so when our population is growing,” he said.

“Once the economy picks up again, both locally and internationally, the buyer sentiment will return and there will be ready stock.”

And although Putrajaya’s efforts to stimulate the market via incentives like the stamp duty waiver for first-time home owners may increase buyer interest, people would – generally – still be very cautious, he said.

“Prices reflecting the current market conditions are normal and should not be a result of overpriced property. Developers treat properties as stock, so just like supermarkets, they will sell their stock, even at losses to recoup their capital for future investment.”

 

Image source: Free Malaysia Today

 

Ready for 2019? Check out PropertyGuru’s predictions for the 2019 property market in Malaysia with a lookback at the 2018 asking price and rental price trends, as well as most popular townships to buy a propertyRead Property Outlook Report 2019 here.

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