What causes over 29,000 new homes to remain unsold in Malaysia?

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Reasons for Over 29,000 Unsold New Homes in Malaysia Identified

A significant number of completed new homes, specifically 29,698 units valued at over RM18 million out of 127,604 launched in the first quarter of this year, remain unsold in Malaysia. This figure represents a slight decrease from the 30,664 unsold units recorded in the preceding quarter. The primary factors contributing to this situation include potential buyers' inability to afford market prices and the absence of a cohesive system that effectively matches housing supply with demand based on specific locations.
Inability to Meet Market Prices

A key driver of unsold inventory is the mismatch between prevailing market prices and the purchasing power of prospective buyers. While the Ministry of Housing and Local Government (KPKT) has established a ceiling price of RM300,000 for affordable housing under the National Affordable Housing Policy, a substantial portion of newly launched units may still exceed what a significant segment of the population can afford. This price sensitivity directly impacts sales velocity, leaving a considerable number of completed units without buyers.
Lack of Integrated Supply and Demand Matching System

The absence of a centralised, integrated system to align housing supply with demand across different locations is another significant challenge. Without a mechanism that provides clear data on where demand is highest and what types of properties are most sought after, developers may inadvertently build in areas with lower absorption rates or construct units that do not meet local needs. This lack of strategic foresight contributes to an oversupply in certain markets, exacerbating the problem of unsold stock.
Government Initiatives to Address Oversupply

In response to the persistent issue of oversupply, the ministry has been urging developers to conduct thorough feasibility studies before commencing new projects. This proactive measure aims to encourage a more strategic approach to development, ensuring that future construction aligns better with market realities and demand patterns. Furthermore, KPKT is actively engaged in a Housing Data Analytics Study, a comprehensive initiative designed to gain a clearer understanding of national housing management.
Development of a Property Data Hub and Integrated System

The insights gleaned from the Housing Data Analytics Study are intended to inform the development of a robust property data collection centre. This platform will consolidate information on housing demand and supply, serving as a crucial resource for decision-making at both federal and state levels. Complementing this, the government is also developing the Housing Integrated Management System (HIMS), a one-stop centre for housing development matters. HIMS is slated for completion by April 2021 and aims to streamline processes and improve information management within the housing sector.

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What causes over 29,000 new homes to remain unsold in Malaysia?

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