Developers foresee dark times due to glut, worse than 1999 crisis

GEORGE TOWN (Jan 30): The issue of oversupply of homes in the country is worsening, and authorities need to take action, especially in the affordable housing category, say developers,

The Malay Mail reports that Penang Real Estate and Housing Developers Association (Rehda) chairman Datuk Toh Chin Leong said this was also why the National Home Ownership Campaign was being conducted.

Alleviation of the glut was needed urgently, he said, expressing concern for properties in the sub-RM300,000 category. 

“In these lower priced ranges, most of the buyers could not get loans so there is an oversupply of these properties,” he was quoted as saying.

Toh said that the excess did extend to other price categories, but the problem was not as severe.

“If we look at the middle range of between RM600,000 and RM800,000 that are in good locations, we can still sell these properties,” he said.

The ownership campaign and other measures introduced by the government may have stemmed some of the deterioration of the already softening property sector this year, he said.

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According to Penang Rehda’s former chairman Datuk Jerry Chan, developers were expecting 2019 to be a worse than the Asian Financial Crisis at its peak in 1999.

“Back in 1999 it was an Asian situation, but back then, there was no severe overbuilding and the number of overhang units now is something we’ve never seen before,” he said.

Kuala Lumpur and Johor were facing a more severe overhang than Penang, he said.

Chan opined that tight lending rules prevented willing buyers from buying homes.

New guidelines introduced in 2013 have reportedly led to high loan rejection rates. BNM consistently rejects the notion as overstated.

“It was easier for buyers to buy property in 1999 as it was easier to get loans then compared to now,” Chan said, adding that the government needs to revisit existing lending guidelines to help Malaysians own homes.

The news portal reports that both individuals did not offer exact numbers when asked for data to support their claims regarding the glut in the general market and the affordable home sector.

Toh cited the lack of a unified database to collate the necessary information, stressing that such a centralised database was needed in order to more accurately gauge the housing industry.

“Rehda is now working together with the housing ministry to come up with a more comprehensive database on the property industry,” he said.

The National Home Ownership Campaign was introduced recently, to be  launched in March, where some 30,115 completed homes nationwide will be up for sale.