KUALA LUMPUR — Compared to the same period last year, the property market has seen a 48.35% increase in unsold completed residential units as of September 30.
A report by The Star cites a Valuation and Property Services Department (JPPH) source who said that the JPPH uses data they receive from developers, and that if information is withheld, it would not paint an accurate picture of the current situation. JPPH’s latest report states that Kuala Lumpur has no unsold completed serviced apartments or SoHos.
Figures by JPPH released on Dec 20, show that there are 30,115 unsold units worth RM19.54 billion (up by 56.44%) compared to 20,304 unsold units worth RM12.49 billion last year.
In Q316 (third quarter of 2016), the number unsold homes were valued at RM8.27 billion.
The data reveals that the overhang value rises to RM27.38 billion for 40,916 units if serviced apartments and small offices home offices (SoHos) are tallied.
Units range in price, from RM50,000 or less to over RM1 million.
The majority of unsold homes are valued at RM500,000 and above with more than 12,000 homes unsold. Homes in the RM200,000 to RM250,000 range, are at 3,500 unsold units.
Overhang property units are units that have been completed for nine months and have received the certificate of fitness but remain unsold, as defined by the JPPH.
Johor is the state with the highest total overhang, at RM10.6 billion. Most of this is serviced apartments and SoHo units with 7,714 unsold homes valued at RM6.16 billion. Residential overhang is valued at RM4.44 billion, at a total 6,053 unsold units. This is an increase of 55% from the 3,901 unsold units last year.
Selangor has an increased overhang of 4,524 (up by 25.81%), Penang at 3,261 units (up by 43.59%) and Kedah at 3,450 units (down by 2.38%).
The unnamed JPPH source says that local authorities convert land to commercial status, in order to obtain higher land premiums from developers, and higher taxes from owners of the units.
Developers then attempt to keep unit prices low by building shoe-box sized units on commercial land, which has a higher land-price.
“Buyers bought these units because they were priced at around RM500,000 but they did not know that they would have to pay higher service charges, utility bills and other taxes because of their commercial status.
“When they get the bills, they are shocked with the high charges,” the source was quoted as saying.