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Over 80% Unsold Houses in Malaysia Cost Above RM250k & We Still Can’t Afford Them

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Over 80% Unsold Houses In Malaysia Cost Above Rm250K And M'Sians Can'T Afford Them - World Of Buzz 2
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The property prices in Malaysia have been increasing exponentially over the recent years and it looks like more and more Malaysians can’t afford to buy a home for themselves. In the latest financial stability review for the first half of 2018 released by Bank Negara Malaysia (BNM), they highlighted that the property glut in the market has caused an imbalance, The Edge Markets reported.

The oversupply of properties with not enough buyers who can afford to buy them due to staggering prices is the main reason for this issue as BNM says that the demand for affordable housing is still there. According to Malay Mail, as of end-March, the number of unsold housing units increased to 146,196 units with more than 80% of unsold units priced above RM250,000. 

“Excess supply of office space and shopping complexes is also expected to persist as vacancy rates deteriorated further in the first quarter of 2018. Nevertheless, sustained demand for affordable housing, particularly from first-time home buyers and prudent underwriting practice in lending to the property market and related sectors are expected to mitigate risks of a broad-based price correction,” BNM said.

Over 80% Unsold Houses In Malaysia Cost Above Rm250K And M'sians Can't Afford Them - World Of Buzz

Source: the star

This statement echoes the one that BNM made in February where they warned that there was a shortage of affordable houses in Malaysia. In that particular report, they also mentioned data showing housing prices to be “seriously unaffordable” since 2016 by international standards. That is so sad but so true!

Although a temporary freeze on four types of major construction projects had been ordered, it looks like the oversupply problem still persists. This has resulted in banks being extra cautious when lending out money to borrowers as they are very strict with the guidelines to ensure that only high-quality loans were given out. 

“About three-quarters of new loans approved were to borrowers with debt service ratios (DSR) of less than 60 per cent,” BNM said.

“Overall household debt accumulation has also been on a more sustainable path relative to income growth, as a result of the cross-cutting measures that have been implemented since 2010. The ratio of household debt-to-GDP continued to moderate and currently stands at 83.8% in the 2Q 2018 (2017: 84.2%),” they added.

With high property prices constantly surpassing the affordability of average wage earners in Malaysia, this problem needs to be addressed well. Otherwise, BNM says that with the shortage of affordable housing, the goal of owning a home in Malaysia will be unreachable for ordinary Malaysians. 

What do you think about this property glut in Malaysia? Let us know in the comments section!

 

Also read: 11 New Malls Are Opening in Klang Valley in 2018 But Here’s What Locals Are Saying

Do We Really Need 11 New Malls In The Klang Valley? - World Of Buzz 9


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