By THE STAR
PETALING JAYA: Stringent lending rules is a major factor contributing to the rise in unsold stocks in the property market, according to Real Estate and Housing Developers Association (Rehda).
Its president Datuk Seri FD Iskandar, who was revealing Rehda’s Property Industry Survey for the second half of 2016 and Market Outlook for the first half of 2017 yesterday, said end-financing remains the major problem for unsold units and loan rejection, especially for properties priced at RM700,000 and below.
“Malaysia’s household debt is not as high as Singapore. In countries like Australia, their household debt is also quite high at 83%, but close to 70% comprised mortgages,” he said.
“In Malaysia, the household debt is about 87% but only 50% is for mortgages. A lot of unsold stock is because of the financing issue,” Iskandar said at a media briefing yesterday.
According to the Valuation & Property Services Department’s (JPPH) Property Market Report 2016, which was launched on Tuesday, there were 14,792 overhang units in Malaysia worth RM8.56bil last year, up by 43.8% in volume and 70.7% in value, against 2015.
Iskandar said yesterday that there is actually a shortage of homes, especially in the affordable range, in places like Klang Valley.
“In one household you have around four people. In the city it’s three or even lesser. At over 2.5 million people (coming in over the next three years), you need more than 600,000 houses,” he said.
“If you look at the demographics of the country, 63% of Malaysians are still below the age of 35 and these are people looking to buy houses. One day, these are the people that will want to upgrade and we do not have houses – be it affordable, middle or upper market, as the market grows.”
He also cautioned that the incoming supply of homes would have to be made affordable for the public, so as to prevent prices from escalating drastically.
“The fewer the supply, the faster the prices of property will escalate,” he said.
– Malaysia Property News