New scheme to help more to buy houses
Budget 2020 to address mismatch in housing supply and demand
KAJANG: The government continues to consider schemes and initiatives to be implemented in the upcoming Budget 2020 to address the mismatch in the housing supply and demand.
Deputy Finance Minister Datuk Wira Amiruddin Hamzah hinted at a possible initiative to be introduced during Budget 2020 that would improve the bankability of home-buyers.
Speaking after the Malaysia property market briefing for the first half of 2019 (1H19), Amiruddin said the government was still in the midst of formulating the budget and is getting suggestions from the rakyat.
“What is important is to come up with a scheme for those who are less bankable to help them become bankable -- with some innovative schemes.
“I am not supposed to give away anything here, but it would be something along that line,” he said.
In light of the residential property overhang, Amiruddin hopes such schemes would be able to address the mismatch in the housing supply and demand.
According to the National Property Information Centre (Napic), which is under the purview of the Finance Ministry, the residential property overhang continues to be on the rise, though at a lower rate as compared with 1H18.
There were a total of 32,810 residential overhang units worth Rm19.76bil during 1H19, an increase in volume of 1.5% while the value decreased by 0.5%.
The bulk of the overhang units were condominium and apartment units priced between RM200,000 and RM300,000, mainly in Perak.
Amiruddin said a post-mortem of the data would be required to understand why there was a significant overhang in this segment to avoid a mismatch, going forward.
“There could be many reasons behind this -- it could be that home-buyers prefer staying in landed properties instead of high-rise residential units, or that the overhang residential units are located far from a commercial zone or the buyer’s preferred location.
“Despite the affordable price range, there is still the occurrence of property overhang.
“This is something that we probably were not expecting, as we thought overhang properties were those priced above Rm1mil,” he said.
In 1H19, the property sector recorded 160,172 transactions worth Rm68.3bil, representing a 6.9% increase in volume and 0.8% in value as compared to 1H18, which recorded 149,862 transactions worth Rm67.74bil.
Residential property continued to support the overall property sector with a 62.4% market share.
There were 99,922 transactions worth Rm34.65bil recorded in 1H19, an increase of 6.1% in volume and 9.5% in value.
Performance across the states improved in the review period, all recording a higher market volume except for the Federal Territory and Perak.
In the primary market, the number of new launches in 1H19 was far behind those recorded in the same period last year. There were 23,591 units launched, a contraction of 49.4% compared to 46,617 units in 1H18.
Apart from that, a number of policies and initiatives have been introduced either directly or indirectly, to ensure that house prices remain at a reasonable level.
As such, the Malaysian house price index stood at 194.8 points as at the end of 1H19, increasing only by 0.9% as compared with the previous year.
Kuala Lumpur and Penang saw a slight increase in house prices during the period, while house prices in Johor and Selangor remained flat.
The ratio of loan approval to loan application for the purchase of residential properties in 1H19 stood at 42.5%, according to Napic.
Compared with the same period last year, loan applications increased by 12.1%, while loan approvals grew by 10.8%.
However, Bank Negara, in its recent halfyear financial stability review report, highlighted that the leverage of borrowers earning less than RM3,000 per month has risen steadily, although the share of household debt held by this group has declined.
This was due to housing loans that have been made more accessible under various loan assistance schemes introduced in recent years.
As such, this borrower group remains susceptible to financial distress, given its limited financial buffers to weather potential shocks.
Meanwhile, on commercial properties, there were 12,960 transactions worth Rm12.53bil recorded in the first half of the year, up 20.4% in volume but value declining by 20.8%.
The shop sub-sector dominated 53.4% of commercial property transactions and 46.3% of total value, recording 6,923 transactions worth Rm5.8bil.
The shop sub-sector overhang continued to increase as well, recording a total of 5,760 units with a value of Rm4.98bil, up 13.9% in volume and 22% in value against the preceding half.
However, the unsold under construction and not constructed scenario improved, with volume declining by 11.9% to 6,370 units and 3.6% to 371 units, respectively.
The Unsold Property Enquiry System Malaysia (UPESM 2.0) Malaysia was also launched in conjunction with the briefing yesterday.
The improved system enables users to obtain data related to unsold properties in Malaysia according to state, district and local authorities in a faster and more informative manner.