Redha chairman Datuk Toh Chin Leong said the property glut was mostly in the RM300,000 category. - NSTP/File pic

GEORGE TOWN: Developers, concerned with the oversupply of homes in the country, are expecting this year to be worse than 1999, when the Asian Financial Crisis was in full swing.

As such, they urge the relevant authorities to take necessary measures to address the issue and alleviate the glut.

Former Penang Real Estate and Housing Developers Association (Rehda) chairman Datuk Jerry Chan said there was no severe glut back in 1999, and it was easier to buy property then.

“However, the number of overhang units now is something which we have never seen before. The situation is more serious in Kuala Lumpur and Johor compared to here.

“And developers are expecting this year to be worse than in 1999, when it was an Asian situation then,” he told newsmen today.

Datuk Jerry Chan says there was no severe glut back in 1999, and it was easier to buy property then. - NSTP/MIKAIL ONG

Chan said in Penang alone, there was about 40 per cent unsold units, involving affordable and luxury categories.

He nevertheless said there was still demand for properties as there were still buyers, but stressed that tight lending rules were a major hindrance.

“The government must revisit the existing lending guidelines if it is serious about helping Malaysians own homes,” he added.

Meanwhile, current Redha chairman Datuk Toh Chin Leong said the property glut was mostly in the RM300,000 category.

He said many of the buyers could not get loans due to the stringent guidelines, prompting oversupply of such properties.

“This is why the National Home Ownership Campaign is being launched.

“The already softening property sector will further deteriorate this year if the ownership campaign is not launched or measures not introduced by the government,” he said.

The government recently introduced the National Home Ownership campaign, to be held in March, to sell some 30,115 completed homes nationwide.

Toh, however, said there was no unified database on the unsold units in the country.

Penang Real Estate and Housing Developers Association (Rehda) chairman Datuk Toh Chin Leong (right) speaks to reporters at Axis Complex in Jalan Cantonment, Penang. - NSTP/MIKAIL ONG

Meanwhile, Gerakan national chairman Datuk Dr Dominic Lau Hoe Chai voiced reservation towards the announcement of a mega home ownership expo, stressing that such measure was only a stop-gap measure to stimulate the housing market but does not tackle the fundamental issue on the ground.

“First of all, while the intention of the government is good in enabling more Malaysians to own their dream home, the main issue is the price of these affordable houses.

“Simply offering discounts up to 10 per cent is akin to making this expo look like a garage sale where everything must be sold out to clear the backlog. Is there any consideration on what implications it might bring to the average Malaysian and the economy?

“Our household debt is already among the highest in the region at 83.2 per cent and 52.8 per cent of this debt itself is being used to buy a house. This is against the recommendation that housing debt should not exceed 1/3 of a person’s salary,” he said.

Lau said the major problem for many vacant units was not due to the lack of interest but due to the dichotomy between the price and salary earned by Malaysians which made the majority of the housing loans being rejected.

As such, Lau said the government should consider introducing the concept of Basic Housing or introduce a quota to build more of these houses.

He said in the concept of Basis or Barebone Housing, all opulent features and designs were stripped with only the basic features being retained.

“By retaining only the basic features, it will lower the price of these houses.

“Finally, the government should reduce the price of housing and construct real ‘affordable housing’, enabling the people to own their dream house in addition to increasing the stamp duty on foreign buyers while abolishing the 5 per cent real property gains tax (RPGT) currently imposed on Malaysians,” he said.