Danger of oversupply of affordable housing?

KUALA LUMPUR (Jan 17): The government should ensure that the many affordable housing schemes by various federal and state agencies will not create an oversupply of affordable homes in the market, said CBRE|WTW Malaysia.

“We are seeing that for first-time homebuyers, the properties priced about RM300,000 are now being offered by private property developers as well as government entities such as PR1MA, RUMAWIP, Rumah Selangorku and others.

“But the issue here is that there is no single government body that monitors the situation, so we are not sure whether the products launched are suitable for the target market.

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“We don’t want an oversupply of affordable homes like what we had with the PPR (Program Perumahan Rakyat) where there was an oversupply years ago,” said CBRE|WTW Kuala Lumpur director Ungku Mohd Iskandar Ungku Ismail at the real estate consultancy’s media briefing today.

CBRE|WTW Malaysia managing director Foo Gee Jen said there are no less than 10 government agencies providing similar products in the market but they do not communicate with each other. This could eventually impact market supply and demand.

“This is a fundamental issue that the government needs to take a look at. We don’t want to have an overlap among the various agencies as this may result in an oversupply of affordable housing,” he said.

On the supply of non-landed homes in the Klang Valley, Mohd Iskandar said there are 21 developments which were completed in the Klang Valley in 2017, supplying an additional 8,300 high-rise homes into the region, bringing the cumulative supply to 46,400 high-rise homes.

“In the next two to three years, there will be an incoming supply of about 14,000 high-rise homes entering the Klang Valley property market,” he added.

Mohd Iskandar also noted that the upcoming hotpsots in the Klang Valley are located along the northern and southern Klang Valley areas such as Rawang, Puncak Alam, Semenyih and Sepang.

Commenting on the retail sector, he said the rising competition between malls have resulted in a change in the   tenant mix of malls.

“The emergence of e-commerce have turned bricks-and-mortar retail shops into offering consumers an omni-channel shopping experience.

“Not only that, we also see that the new retail or neighbourhood malls are focusing more on food and beverage tenants instead of accessories and apparel tenants,” said Mohd Iskandar.

In 2017, there was a supply of 2.7 million sq ft of space into the retail market where the occupancy rate was about 83%, and by 2020, the cumulative retail area will be increased to 71 million sq ft.