Sharp rise in Selangor serviced apartment overhang

PETALING JAYA (April 30): Selangor’s serviced apartment/SOHO overhang units saw a drastic increase in 2019.

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According to the Valuation and Property Services Department (JPPH)'s 2019 Property Market Report, there were 3,118 overhang serviced apartment/SOHO units worth RM1.63 billion in Selangor last year, a substantial 78.9% rise in volume and 69.1% rise in value compared with 2018's 1,743 overhang units worth RM963 million.

However, the unsold under construction and not constructed serviced apartment/SOHO units declined by 26.3% to 7,867 units (2018: 10,681 units) and 91.3% to 202 units (2018: 2,310 units), respectively.

“Completions of new serviced apartment/SOHO units have increased substantially by 63.2% to 17,893 units (2018: 10,963 units) in 2019. On the other hand, starts and new planned supply numbers shrank by 10.6% to 6,969 units (2018: 7,795 units) and 80.9% to 2,448 units (2018: 12,787 units) respectively,” stated the report.

As at end-2019, there were 104,007 existing serviced apartments/SOHO units with another 56,918 units in incoming supply and 21,791 units in planned supply.

Generally, Selangor’s residential primary market softened in 2019 with 18.1% fewer new launches at 9,970 units. Sales performance was also low at 30.6% compared with 44.6% in 2018.

Meanwhile, in the other commercial property sub-sectors, overall transactions of shop units rose by 9.5% in volume and 7.3% in value although overhang increased by 11.7% to 684 units. Purpose-built offices recorded a slightly lower average occupancy rate of 71.7% in 2019 compared with 74.1% in 2018.

As the bread and butter of Selangor property market, industrial property recorded 2,212 transactions worth RM8.28 billion, up by 9% in volume but transaction value reduced marginally by 0.2% (2018: 2,029 transactions worth RM8.29 billion).

EdgeProp Malaysia will be hosting a virtual Fireside Chat titled "The Malaysian property market picked up in 2019! Could this be its last hurrah?" through Facebook Live on May 1 at 2pm.

Join us for more insights from Rehda president Datuk Soam Heng Choon, Rehda vice-president and Selangor branch chairman Zulkifly Garib and Rehda Johor branch chairman Datuk Steve Chong Yoon on the market outlook post-MCO!

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