Malaysia’s property woes might soon come to an end as developers are now building fewer homes. It appears the measures are effective as official data shows the number of completed units decreased by one-third in the first half compared to the same period in 2018. New projects, meanwhile, dropped by a fifth.
The government last year put into place several measures aimed at addressing the country’s problems of a US$4.7 billion (RM19.67 billion) property glut and a lack of affordable homes, reported Bloomberg.
To address the problem of developers building too many expensive condominiums despite Malaysians needing cheaper homes, the government urged companies to offer discounts.
Finance Minister Lim Guan Eng also revealed incentives aimed at home buyers in the 2020 state budget, which included state guarantees to lower mortgage rates and support for rent-to-own programs.
“The market will level up in the next two years. The number of available units has dropped due to the ‘self-discipline’ of developers and the sales campaigns,” said Soam Heng Choon, Real Estate and Housing Developers’ Association president.
Homes worth RM19.8 billion did not sell for the first six months, which is a 0.5 percent decrease from a year earlier. Transaction value did rebound, increasing 9.5 percent.
Home prices remained muted though, with the average price of a house easing in the second quarter to RM420,345, which is the lowest level in a year.
Additionally, the minimum price that foreign buyers can spend on property will be reduced to RM600,000 from RM1 million beginning next year.
This move is seen to greatly benefit the country’s real estate glut, as foreigners’ access to properties will be enlarged.