SIZZLING HOT TOPIC

Real estate is a hot topic in Malaysia. Everybody is talking about it, prices are going up, and today is your last chance to buy it — otherwise you risk spending the rest of your life paying rent.

But where do you buy, and how?

Buying a house isn‘t easy, especially when banks have become more stringent with lending. So how else can you buy a house if your loan application is rejected and your income level doesn‘t allow you to buy the property in cash?

We shouldn‘t just blame bankers — developers also have been increasing their selling price in tandem with the rising cost of building materials and high compliance cost.

According to National Property Information Centre, as of the third quarter of last year, the number of unsold homes in Malaysia reached a new high of 30,115 units worth RM19.54 billion. (These are unsold homes completed nine months from Certificate of Completion and Compliance and exclude residential properties build on commercial land such as serviced apartments and SoHo.)

From the 30,115 unsold homes, some 17,971 units are priced below RM500,000, while the remaining are units range between RM500,000 and RM1 million.

This figures are alarming and developers will have to find a solution on how to sell the units or face the consequences of being financially burdened.

A property expo will be held on March 1 to 3 that will see about 180 developers in Malaysia offer some 22,000 properties worth RM22.5 billion collectively.

Those on the list include medium-end to luxury developers listed on Bursa Malaysia and who are answerable to their shareholders if they report grim sales figures. Most of them have already reported lower property sales and net profits.

But who will buy their units and how much are they able to sell at the expo, amid the current economic conditions and when Malaysian houses are severely unaffordable? Most medium-end developers sell properties starting from RM500,000, while units by luxury developers can go beyond RM1 million.

Up to 10 per cent discount or more can be expected from the developers, with other goodies thrown in like free kitchen cabinets, air-conditioners and fully-fitted bathrooms.

However, the Bottom 40 per cent group is finding it difficult to own a house as revealed by Khazanah Research Institute (KRI).

According to KRI, the real residual household income is merely RM76 per month for those earning less than RM2,000.

So, is it “mission impossible“for every Malaysian to own house?