Putrajaya unveiled the Home Ownership Campaign at the start of this year in a bid to help thousands of young Malaysians buy their first homes, while also hoping to reduce the overhang of high-end properties littering much of Klang Valley’s prime land. — Picture by Yusof Mat Isa

KUALA LUMPUR, Aug 5 — The government’s home ownership drive saw over 8,000 units sold with developers clocking in transactions worth RM5.7 billion, making it a success as this is RM2 billion more than the target set at the start of the six-month campaign.

Yet, the units sold are just under a third of the properties left unsold throughout the country.

The Housing and Local Government Ministry — better known by its Malay initials KPKT — said in an email to Malay Mail a total of 8,823 units were sold up until June, with a sales value of RM5,727,562,976.13.

This is a massive leap from the recorded sales revealed by its minister Zuraida Kamaruddin in June, when she told Parliament that 1,144 property units valued at RM650.87 million as were sold as at June 7.

However, Zuraida did not provide a breakdown on the units sold in her recent parliamentary written reply to a question from Rasah MP Cha Kee Chin, as reported by business paper The Malaysian Reserve.

Putrajaya unveiled the Home Ownership Campaign (HOC) at the start of this year in a bid to help thousands of young Malaysians buy their first homes, while also hoping to reduce the overhang of high-end properties littering much of Klang Valley’s prime land.

Bank Negara Malaysia said in a housing report published last October that the number of unsold properties was at a critical level.

But property analysts were less optimistic about the campaign, saying incentives like stamp waivers or small discounts could draw enough buyers to clear the staggering number of unsold units.

This was despite developers’ confidence that they could sell at least RM3 billion worth of homes by June.

Carmelo Ferlito, a senior fellow at the Institute for Democracy and Economic Affairs, in a paper on the domestic housing market published in June warned about the situation’s potential to spark a wider financial crisis.

“The industry is suffering a downturn that might lead to a wider economic crisis,” Ferlito said in a report titled “Malaysian Property Market: Affordability and the National Housing Policy”.

“The negative stage experienced by the housing sector is recognisable in the increasing number of unsold units, in the declining number of transactions and the progressive cooling down of prices.”

National Property Information Centre showed more empty homes were added to the glut in the first quarter of 2019.

The number of unsold units up until April stood at 32,936 with a value of RM37.23 billion, an increase of 1.9 per cent by units and 0.5 per cent by value year-on-year.

The bulk of these are residential properties priced between RM200,000 to RM300,000, conventionally defined as “affordable”. This was followed by homes priced between RM300,001 and half a million.

Total number of unsold units under the two category stood at 15,843. The first had a value of RM1.8 billion, the second RM3.2 billion.

KPKT did not reply to Malay Mail’s request for a detailed breakdown of the figures.

Last month Zuraida said the HOC would be extended until year-end, prompted by the “encouraging” response.

A few days ago, Institute for Democracy and Economic Affairs said the government’s aim of pushing properties below RM300,000 in the next six months is unlikely to reduce the severe overhang, nor will it increase overall sales.

The HOC is a public-private initiative organised by the Ministry of Finance, KPKT and the Real Estate and Housing Developers’ Association.

Critics have repeatedly stressed that underlying causes of the housing glut is structural, and experts have said solving it requires total policy revamp.

Zuraida could not be reached for comment at the time of publication.