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Affordable homeownership continues to elude Malaysians

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Record-breaking unsold units continue to plague housing industry

 

 

 

Malaysians are generally adopting a ‘wait-and-see’ attitude towards better housing deals especially after the May 9 general elections. With the new Pakatan Harapan government coming into power, there is an uncertainty regarding the future of Malaysian real estate particularly those associated with foreign property investments. Although the feel-good factor is omnipresent, the debt-ridden national economy continues to aggravate the prevalent stagnation in the residential markets. A high rejection rate of home loans among applicants coupled with a glut or an oversupply of affordable homes have brought about the current property overhang situation.

 

 

Today’s developers are also keen to provide more high-tech solutions such as smart devices and home appliances to lure home buyers to purchase their properties. Smaller residential units are also the rage nowadays among middle-income groups due to their affordable price range. More than three-quarters of affordable housing nationwide remains unsold according to The Housing and Local Government Ministry (KPKT), with an overall property hang valued at a whopping RM22.5 billion!

 

 

An oversupply of houses in the country has led to a serious case of property glut within the country. The fundamental crux or core of the issue has its roots in end financing, with local banks and financial institutions solely to be blamed. Perhaps some form of affirmative action plan could be devised and drawn up by the central bank (i.e. Bank Negara) in the immediate future to address existing complaints and prevailing grouses of home buyers with respect to obtaining approval for their home loans. Greater solutions and more flexible approaches must be sought by REHDA itself in collaboration with the major real estate developers in order to actively promote and provide affordable housing for all Malaysians. According to a recent census conducted by REHDA’s Property Industry Survey, more than sixty percent of the total residential units launched during the first half of this year were affordable houses. As more and more housing projects are launched nationwide, the glut or oversupply of residential estates continue to pervade the local real estate market.

 

 

Malaysians have long lamented the difficulty of getting home loans as well as getting them approved by banking institutions. This is also the primary contributing factor why many affordable residences particularly Bumiputra units remain unsold. End-financing remains a major stumbling block towards affordable homeownership in Malaysia. Loan rejections have increased almost forty percent over the past year, specifically for properties priced below RM500,000. In reality, a prospective homebuyer’s payslip or salary does not always commensurate with or measure up to their disposable incomes. In reality, affordable housing remains an elusive dream for Malaysians.