PROPERTY developers eager to recoup their capital and offset losses are now slashing the price of unsold homes, as recent data showed a worsening of the property glut in Malaysia.

Radzi Tajuddin, chief executive officer of Hartabumi, a real estate portal for Bumiputera lots in the Klang Valley, said instead of waiting for the situation and economy to improve, developers are taking proactive steps to reduce the prices of unsold units.

“Developers need to slash prices seeing as the market is challenging. Housing units are increasing, whereas household incomes have not increased by much.

“So, the only step they can take is to reduce prices,” he told The Malaysian Insight.

Statistics from the Valuation and Property Services Department (JPPH) revealed that unsold property nationwide was estimated at RM19.54 billion, a leap of 56.44% from the RM12.49 billion last year.

As of September this year, the number of completed and unsold residential units totalled 30,115 – an increase of 48.35% from the 20,304 units in 2017.

Radzi said developers are also partly to blame for the glut of unsold property, as many built homes and shoplots without first understanding market demand.

“Developers know they made the wrong decision building a product, so they have to cut the price.

“So, instead of hoping to sell all their units and make RM50 million, they can sell it all at RM40 million and still make a profit,” he said.

To help affected developers offload their unsold units, the Real Estate and Housing Developers Association (Rehda) plans to launch a home ownership campaign next month.

However, Radzi remained unconvinced that more campaigns – or even government intervention – would resolve the problem quickly.

“From the onset, it is developers who have been building the wrong product, so the developers should take responsibility.” 

The government can only act as a middleman by releasing data on market demand nationwide and holding frequent discussions with developers and other stakeholders, he said.

“The government needs to lead the effort to compile data and work with industry players.

“This way, we know for sure what is in the market, which products are selling and which are not. Right now, we don’t know what the actual demand is.”

JPPH defines unsold units as those that have been completed and launched for at least nine months, and priced under RM1 million.

Currently, some 3,500 unsold units are priced between RM200,000 and RM250,000, but the bulk of properties – more than 12,000 units – cost RM500,000 and above. – December 31, 2018.