Malaysia Overhang Residential Properties Showing No Sign of Easing
For years we have been seeing significant property overhang issues in Malaysia, particularly residential property in prime and developed areas, mainly attributed to oversupply in relation to demand.
Despite various measures taken by the government to encourage the purchase of property, the problem of overhang persists and remains severe. In fact, it is alarming in certain states such as Johor and Klang Valley, constituting over a total of 60% of overhang residential property in Malaysia.
This issue, if left unattended, will surely bring negative implications in the long run.
Firstly the persistent overhang issue will have an adverse impact on local developers as they will face higher competition on top of already stagnating house prices. Developers with overhang issues will potentially have cash flow concerns besides having to fork out significant maintenance expenses to keep this units 'sellable'
On top of that, the overhang issue also affects the housing market sentiment and gives the impression of oversupply, causing purchasers to further think twice before making a purchase in view of the sluggish market. This unavoidably creates a vicious cycle of lesser demand and oversupply, causing the issue to worsen.
Turning a problem into a solution
To tackle an issue effectively, we must tackle the root cause of it. There are two main prevalent factors in regards to property overhang - Overprice and Oversupply.
The massive building of overpriced houses outside the reach of the masses, for example, in Johor to capitalize on the foreign purchasers is turning upside down when in fact the demand of foreign purchases could not match with the supply and there is no way local demand can fill the gap.
Unless we tackle the root cause of it - pricing.
Vivahomes prides itself in helping developers to tackle the overhang issue. Over the past 5 years, we have been working hand in hand with renowned developers to clear overhang inventory through effective marketing strategies and modification of the property packages to suit purchasers' appetites.
With proven track records, in-depth study of market trends,s and most importantly strong line of marketing expertise for overhang property, we seek to provide solutions for all developers who are currently facing the overhang issues and to establish long term win-win relationships.