News: Unsold Units Of Above Affordable-Home Priced Properties On The Rise

Sep 19, 2019

The number of unsold units of properties costing above the affordable-home price range have been on the uptrend in individual states, revealed Bank Negara Malaysia (BNM) in its Financial Stability Review for 1H 2019.

The central bank also warned of the increasing vacancy rates in commercial properties, such as shopping malls and office space.

“This contrasts with a strong recovery in housing transactions for units priced below RM500,000 recorded in the first quarter,” it said in the report.

Read more: If You’re On The Lookout For An Affordable Home, Here’s A Guide Just For You!

BNM noted that while house prices continued to increase, the pace of growth has been more moderate, on the back of sustained demand for affordable homes, reported The Edge Markets. 

“While the mismatch between housing supply and demand is likely to take some time to resolve, firm demand for affordable housing is expected to mitigate risks of a sharp and broad-based decline in house prices,” explained BNM.

BNM also cautioned that the incoming supply of new office space and shopping complexes is still significantly higher compared to average annual demand.

“This is likely to further compound already elevated levels of vacancy rates for prime office and retail space, and prime retail space per capita in major cities. Banks remained cautious in lending to this segment, with low exposures that continue to be largely performing.”

Read more: What Is Skim Rumah Pertamaku/My First Home Scheme?

With this, BNM shared that commercial remain on steady footing to weather any shock coming from the property market.

“Based on the Bank’s sensitivity analysis, banks have sufficient capital buffers to withstand severe losses under adverse stress scenarios in the broad property market which incorporate potential spillovers to other economic sectors that are highly dependent on the performance of the property sector,” said the report.

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Candy Soon
Senior Negotiator
(+60) 12-2227738