I CAN accept it if “they” say the national debt is RM1 trillion after considering contingent liabilities. But to say the value of unsold units in the high-end housing market is now worth RM100 billion is something else. And, to organise a house ownership campaign (HOC) in China or Hong Kong to attract them to come and buy property here is another thing.

At the United Nations, our prime minister is trying hard to correct the current world order, but at home, our data collection, dissemination and its quality do not seem to be in order.  

When the national HOC was launched earlier this year with government support, 22,000 properties worth RM22.5 billion was advertised. Only 24% are affordable homes. 

In January, the National Property Information Centre (Napic) published Q3 2018 data that showed the number of unsold houses in Malaysia had reached a new high of 30,115 units worth RM19.54 billion. But a property consulting firm reported at end-September 2018 that Malaysia’s property overhang was 43,219 units worth RM29.47 billion (serviced apartments and SoHo units included).

More surprises were in store: Napic reported last week that the residential subsector overhang continued to increase, with 32,810 units worth RM19.76 billion unsold.

The above shows the data is either incorrect or not up-to-date when compared with RM100 billion. It gives the wrong impression of the current demand and supply situation, and could severely affect policy decisions. How then can the government achieve its target of offering one million homes to Malaysians if the basic data itself is not accurate?

There is no necessity for an HOC in China or Hong Kong. Let the private developers deal with problems of their own doing. 

Developers insist that this concerns a specific market with units that most locals cannot afford, have been left unsold for a long time and is relatively small. Meanwhile, 19,784 units have been sold by Real Estate & Housing Developers’ Association (Rehda) members under the HOC. This is a huge success by any measure – 90% of the units sold. Strangely, data on how many of these high-end homes were bought by foreigners is not available, though Rehda said it was likely “small”.

Why then the need to go abroad? And, are houses built to cater to foreigners and not Malaysians? Is it maintaining profit margins at the expense of local buyers?

The Q1 filings with Bursa Malaysia shows developers are making handsome profits while still calling for an extension of the HOC. Their balance sheets remain healthy and some are eyeing more land in the Klang Valley. A check on Google of new property launches shows how many are actually affordable developments. The bigger ones are said to be hoarding large land banks.

Bank Negara last year warned that the overhang in the high-end market was at a critical level, especially within the Klang Valley. There should be adequate controls in terms of what is being built and it should not be left to the private sector to decide what and how much to build at its own whim and fancy.

Is it time for consolidation in the industry? 

For too long, the construction industry has been said to be supporting the growth of around 140 other downstream industries, and sustained weak growth would generate ripple effects on the economy.
 
Isn’t it time to have a critical look at this area and, at the other end, for the Malaysian Anti-Corruption Commission (MACC) to start “visiting” various stakeholders?

What say you? – September 29, 2019.

* Saleh Mohammed reads The Malaysian Insight.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.