Developer: Oversupply of unsold units not developers’ fault

PETALING JAYA (Jan 3): Blaming developers for the oversupply of unsold properties is due to a lack of understanding of market needs, says a developer.

Free Malaysia Today reported that Melaka-based developer Anthony Adam Cho said market conditions depended on local and international sentiments, which included the United States-China trade war, the lower prices of commodities and the slower global and local economy.

Cho said that this means people are more cautious in how they chose to spend their money, which did not reflect a lack of demand.

The news portal cites a recent news report where Hartabumi’s chief executive Radzi Tajuddin said developers were partly to blame for the current numbers of unsold property, saying they were built with a lack of understanding about market demand.
 
Figures by the Valuation and Property Services Department (JPPH) released on Dec 20, 2018, 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 the year before, and that the bulk of unsold properties are valued at RM500,000 and above per unit.

Cho, also the Melaka Real Estate and Housing Developers’ Association (Rehda) immediate past chairman, said that demand existed but that potential buyers were unable to obtain loans or were waiting for prices to fall.

“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.

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

Stamp duty waivers and other incentives might increase buyer interest, he said to the news portal, but the people would still be cautious.

“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.”
Tang Chee Meng, the chief operating officer of Henry Butcher Malaysia said that most developers would carry out a market study to finalise their offerings.

“However getting statutory approvals takes time and sometimes market dynamics may have shifted by the time approval is obtained. The developers, especially public-listed ones, have to continue launching as they need to maintain their profit forecasts and not affect their share price.

“Another point to note is that some of the unsold stock are those under the Bumiputera quota, which the developers have to hold until they obtain the official release from the relevant authorities.”