While some property experts had insisted that the struggle is real, with many consumers not being able to purchase homes for themselves due to lack of affordable housing and an oversupply of newly-developed luxury homes, others claimed that the property market in the country may not be as negative as it seems.
On Monday, Deputy Finance Minister Datuk Lee Chee Leong revealed that completed residential units which have not been sold rose by 40 percent to 20,807 units in the first half of 2017, compared with the same period last year.
He said of the units worth RM12.26 billion in total, condominiums and apartments costing over RM500,000 dominate the unsold homes in Malaysia.
However, IQI Global chief economist, Shan Saeed opined that the property market in the country is merely undergoing some ‘sector changes’.
“In some areas, property prices are going up, but there are also areas where the price is going down. The property market moves with GDP (gross domestic product) growth, and the growth is currently very solid and on the upsurge,” he told Astro AWANI’s Markets Today.
“Customers are still buying (property) because income levels are rising. So I believe these concerns concerning the property market are unfounded,” he said.
In terms of the increase in the number of unsold property units, Shan said the price of every asset is determined by market forces.
“Every asset has a threshold in pricing and valuation structure. Yes, there are some units that are unsold in the real estate market. There are many units unsold in Singapore, London, Toronto and Sydney, but that doesn’t mean the market’s bad. Investors are still buying as per the market valuation,” he said.
He also denied the notion that developers are contributing to the alleged property glut by producing high-end homes that consumers cannot afford.
“I think developers are making smarter moves and they are going headway in the market. The market is still very much favourable for clients because the Malaysian market is still undervalued as compared to the ASEAN region. So these developers have played their cards strategically and smartly,” he said.
Shan insisted there is no property bubble brewing in Malaysia.
“Bubbles happen when the land prices are crashing. But not a single area be it in Kuala Lumpur, Penang or Johor Bahru that prices are crashing.
“In fact, land prices are moving upward in a very structured manner. So there is no such bubble in Malaysia,” he added.