IDEAS: Developers can rent out unsold homes

PETALING JAYA (Oct 30): The Institute for Democracy and Economic Affairs (IDEAS) has suggested to developers that they can try renting out unsold homes since there is a property overhang situation, reported Free Malaysia Today (FMT).

IDEAS economist Carmelo Ferlito (pictured) suggested that “developers could hold on to their unsold properties and wait for the market to pick up again by offering rent-to-own schemes”.

But he also added that “prices are unlikely to drop to the point they fell into the so-called affordable category of RM300,000”, reported the news portal.

“For the unsold stock, probably one solution is for the developers to become landlords, to start renting out the unsold units and at least get some cash flow in,” he said.

Ferlito also added that he does think that “calls for lending rules to be relaxed” is a good thing “as this could affect the banking sector and household debt”.

“We want to avoid a subprime-style crisis,” he warned.

National House Buyers’ Association (HBA) secretary-general Chang Kim Loong told FMT that Malaysians “should not be against the idea of renting if they could not afford a home”.

“There is no shame in renting, and aspiring house buyers should continue renting until they are financially ready to buy their dream home,” he said.

The number of unsold properties in Malaysia hit 54,078 units at the end of 1Q2019. The value of the unsold homes was RM37.2 billion, with residential properties making up the bulk of the overhang.