Modest drop in property overhang in Q1 2022

High-rise property make up 58.1% of residential overhang, with 20,680 units.

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KUALA LUMPUR: The National Property Information Centre’s (Napic) property market snapshot for the first quarter of this year (Q1 2022) shows residential overhang has dropped marginally to 35,592 units valued at RM22.45 billion.

Last year, the volume of residential overhang reached an “all-time high” of 36,863 units valued at RM22.79 billion.

As of Q1 2022, high-rise units make up 58.1% of the residential overhang at 20,680 units. Terrace houses comprise 20.8% at 7,407 units, while other property types form the remaining 21.1% (7,505 units).

Johor has the highest residential overhang at 5,992 units, followed by Penang at 5,816 units and Selangor (5,215).

The bulk of overhang properties are priced below RM1 million. High-end properties, which make up 13.2% of the total overhang, amount to RM9.37 billion across 4,706 units.

This is followed closely by properties priced at RM500,000 to RM1 million, making up 28.7% of the total, valued at RM6.9 billion across 10,227 units.

As much as 28.5% (10,158 units valued at RM1.91 billion) are properties priced below RM300,000, which is within the housing ministry’s definition of affordable homes.

Serviced apartments

Serviced apartment overhang has also seen a negligible drop from 24,295 units in Q4 2021 to 24,050 units in the first quarter. However, the total value of serviced apartment overhang has remained stagnant at RM20.45 billion.

With 16,425 units, Johor leads the serviced apartment overhang by a drastic margin. Kuala Lumpur and Selangor take second and third spots, respectively, with 4,459 and 2,337 units.

Johor has nearly 4 times the service apartment overhang compared with Kuala Lumpur. (Wikipedia pic)

A staggering 64.4% of the serviced apartment overhang consists of properties priced between RM500,000 and RM1 million. It carries a value of RM11.61 billion.

This is followed by properties priced above RM1 million, making up 23.8% with a volume of 5,720 units and value of RM7.75 billion.

Serviced apartments priced from RM300,000 to RM500,000 make up 9.3% of the total with RM150 million, while those priced below RM300,000 only comprise 2.5%.

The severity of the overall property overhang begs the question if a return of the Home Ownership Campaign and a more inviting Malaysia My Second Home programme is needed.

New supply

There were 2,936 units in residential new launches in Q1 2022, of which only 164 units (5.6%) have been taken up.

Some 90.5% (2,657 units) of new residential launches are landed properties, while 9.5% (279 units) are high-rises.

Johor saw the most launches with 604 units, followed by Melaka (562 units), Pahang (466), and Selangor (349).

Most of these launches (1,197 units) were for properties priced from RM300,001 to RM500,000, which make up 40.8% of the total.

This is followed by properties below RM300,000 at 32.9%, which amounts to 965 units; and those priced between RM500,001 and RM1 million at 21.8% (640 units).

Only 134 units (4.6%) are properties priced above RM1 million.

This article was written by Vigneswar Rajasurian of PropertyAdvisor.my, Malaysia’s most comprehensive source of property data, property analytics and insights.

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