This article was originally published on the New Straits Time.
There were 30,290 unsold completed residential units (overhang) worth RM19.7 billion nationwide as of September this year, according to Deputy Housing and Local Government Minister Ismail Muttalib.
According to Ismail, this is an improvement over the second quarter, when there were 31,112 unsold units worth RM21 billion. This represented a 2.64 percent decrease in volume and a 1.74 percent decrease in value of unsold units in the third quarter, reported Bernama.
“Although not obvious, there is a drop in the number of unsold houses after some developers reduced prices or gave discounts to clear the supply overhang amidst the uncertain economy,” he said today in the Dewan Rakyat.
The Home Ownership Campaign (HOC) has played an important role in encouraging homeownership and reducing the number of unsold properties. The HOC is a government initiative designed to assist first-time homebuyers while also encouraging the sale of unsold properties in the local housing market.
The campaign began in January 2019 and generated RM23.2 billion in sales, exceeding the government’s initial target of RM17 billion. Datuk N. K. Tong, deputy president of the Real Estate and Housing Developers’ Association (Rehda), had said that as of September 30, a total of 73,503 residential units valued at RM47.38 billion (after discounts) had been sold since the HOC was reintroduced last year.
During that time, he said, buyers received discounts totaling more than RM9 billion. Selangor dominated sales during the HOC, selling 30,888 units worth RM21.1 billion, followed by Kuala Lumpur, which sold 17,468 units worth RM11.6 billion.
Johor came in third with 8,723 units valued at RM5.4 billion sold, followed by Penang which achieved RM4.5 billion in sales with 6,784 units sold. The HOC benefits include significant savings in stamp duty and tax exemption on housing loans, as well as a minimum 10 per cent discount on the purchase price of properties listed under the scheme.
The campaign, which will run until December 31, 2021, will cover registered residential properties worth between RM300,000 and RM2.5 million. Industry participants hoped that the campaign would be extended until June or July of next year, with the possibility of expanding to include the secondary housing market.
With benefits such as stamp duty and tax exemptions, this provides property developers and individual sellers with an equal opportunity to sell their units in the residential market segment.