Headline Property overhang seen not critical MediaTitle The Star Date 21 Jan 2020 Color Full Color Section StarBiz Circulation 175,986 Page No 2 Readership 527,958 Language English ArticleSize 365 cm² Journalist Thean Lee Cheng AdValue RM 18,440 Frequency Daily PR Value RM 55,319

Property overhang seen not critical Consultancy slams report on sector as 'misleading, sensational'

ByTHEAN LEE CHENG market gaining momentum, this report came [email protected] about as quite surprising," he said. Overhang status by type (Q3 19) "What we should be focusing and high- Serviced PETALING JAYA: Property consultancy firm lighting on - instead of sensationalising state- Price range SoHo apartments Zerin Properties said the report card on the ments - should be the need for bolder meas- Below RM200k - 287 ures from the government," Previn said. property sector by a counterpart was both RM200K - RM300k 518 1,550 "misleading" and "sensational." This would include taxes - reverting back to Zerin founder and CEO Previndran Singhe a reasonable real property gain tax rate, fast- RM300K- RM500k 628 1,399 is questioning that assessment by CBRE | WTW. er Malaysian My Second homes processing, RM500K - RM700k 21 3,253 Last week, CBRE | WTW managing director and early announcement or high speed rail RM700K - RM1 mil 227 6,107' 2 Foo Gee Jen was quoted as saying that the re-commencement, among others. Above RM1 mil 63 4,863 Malaysia has been having a persistently overhang was caused mostly by the oversup- I Total 1,457 17,459 ply of high-rise units, mainly serviced resi- stubborn residential overhang for a number dences and small office, home offices (SoHo) of years. Majority comes from Johor 4,825 arid 4,136 units. As at the third quarter of 2019, the residen- Foo said it could take more than five years tial overhang totalled 31,092 units, or 0.4% RM18.77bil. The last couple of years, the com- Semi-detached & for the unsold, high-rise units to be absorbed detached shops into the market if prices do not come down. pletion of serviced apartments and SoHos, "We would like to make it clear that this which are built on commercial land, have 18.9% assessment is misleading given the fact that risen considerably. 5.9% Terraced SoHo the supply is less than 20% of the total over- Commercial land have a higher value than shops hang nationwide of the said properties," said residential land. Developers, in an attempt to Previn. lock in sales during an era of escalating pric- He said Kuala Lumpur is the main driving es, reduced the built-up areas of the units to force of the recovery of the property market give a veneer of affordability. and based on the simple extrapolation of These units are usually studio units of 70.3 sales of 2,500 units a year, if (there were) no about 500 sq ft although the built-up area may Serviced new launches, this would be absorbed in a rise to 800 sq ft. So, if serviced apartments apartment year. and small offices home offices (SoHos) are Referring specifically to Klang Valley's added to the residential overhang, the figures Total overhang Value SoHos and serviced apartment overhang, swell to 50,008 units, valued at RM33.77bil. Units (RM mil) Previn said "although at a considerable He said he is a strong believer of laize faire Serviced apartments 17,459 18,770.47 but "in an economy that is imperfect, balanc- RM3bil," it is about 20% of the total SoHo plus 14,297.17 the serviced apartment overhang of about ing policies are also required." Therefore, Residential 31,092 RM15bil in the country. bumiputra quotas, reducing the minimum SoHos 1,457 699.57 "After tremendous efforts by stakeholders price for foreign purchases (currently RM2mil [ Total 50.008 33,767.21 | in some parts of Selangor) and ramping up of the property industry in 2019 to address Source: Napic issues plaguing the industry and with the discount policies will help the industry.