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New Straits Times
13 hours ago
- Business
- New Straits Times
Mismatch widens as housing supply overlooks majority demand
KUALA LUMPUR: The supply of residential properties in Malaysia continues to diverge from actual demand, with developers favouring mid- to high-end units while most Malaysians, particularly those in the B40 and M40 income groups, struggle to afford suitable housing. Dr Suraya Ismail, Director of Research at Khazanah Research Institute (KRI), said this supply-demand imbalance has led to a growing number of unsold units and limited options for lower-income buyers. "This raises a crucial question. Are Malaysians being presented with a clear and transparent view of the actual state of the property market?" Despite evident signs of oversupply, especially in the Klang Valley, developers are still launching new projects at a steady pace, she said. Current data shows a substantial volume of completed but unsold properties, mainly in the mid- to high-end segment, such as serviced apartments and condominiums in urban centres, she told Business Times. Suraya noted that developers, often backed by strong financing or public-private partnerships, remain confident in long-term market corrections or sustained demand. But she questioned whether such optimism is justified in light of persistent affordability issues. According to her, Malaysia's housing market is suffering from a mismatch between effective demand, defined as what households can afford, and the type of housing being supplied. While prices have risen steadily over the years, they've outpaced income growth, making homes unaffordable for a significant share of the population. The Real Estate and Housing Developers' Association Malaysia (Rehda) declined to respond to questions sent by Business Times. Meanwhile, Suraya said that despite an evident glut in the higher-end segment, housing supply continues to target the top income groups. For example, in 2022, Malaysia's affordable median house price was RM228,168, three times the median annual household income. Yet, only 10.7 per cent of new launches were priced below RM200,000. In contrast, units priced above RM500,000 made up 24.7 per cent of launches in 2022 and rose to 39 per cent in 2023. Between 2020 and 2023, most transactions, 709,283 units, were for homes priced below RM500,000. Properties under RM300,000 made up 56.2 per cent of total sales, highlighting strong demand in the affordable segment. Suraya noted that a closer look at 2023 sales and overhang data reveals the same pattern. Units priced below RM300,000 accounted for 53 per cent of total sales. Yet of the 25,816 overhang units recorded in the fourth quarter of 2024 (Q4 2023), 70.6 per cent were homes priced above RM300,000. "This suggests a strong demand for affordable housing following the population's income brackets, while higher-priced properties encounter challenges in finding buyers. The data highlights the struggle of higher-priced units to attract buyers, resulting in a higher share of overhang," she said. Suraya added that the market has consistently scored above 3.0 on the housing affordability index, signifying 'seriously unaffordable' conditions. Between 2012 and 2014, the median house price rose from RM170,000 to RM270,000 at a compound annual growth rate (CAGR) of 23 per cent, while household income grew at less than half that rate, only 11.7 per cent. "In high-density areas like Kuala Lumpur, Selangor, and Johor, many developments are struggling to sell remaining units. This trend highlights a growing mismatch between supply and actual demand, especially in an environment of stagnant wage growth and tighter lending rules. As stated earlier, the supply is not catering for the realities on the ground. Why, then, are new project approvals continuing unabated? "Approvals are given at the state level and local municipal councils, but there is a gap in the information for the efficient coordination of house prices and the general affordability of the local populace. This could be assisted if developers could give an indication of the feasibility of sales for their plot of land, whether it caters to effective demand, that is, the pricing threshold that the local population could afford, or not exacerbating the glut of supply (overhang and unsold units) within the area, for the approval of development order (DO)." While official NAPIC figures highlight the growing property overhang, defined as units completed but unsold for more than nine months, Suraya cautioned that the problem may be larger than reported. "Are we only seeing the tip of the iceberg? Well, it can be an underestimation," she said. Rethinking property investment: Is it still worth it for Malaysians? With evolving market dynamics, rising rental risks, and slowing capital gains, many are questioning whether property remains a sound investment for the average Malaysian. Suraya pointed to a growing rental supply in areas like Mont Kiara, Bangsar South, KL Eco City, Subang, Shah Alam, and Cyberjaya. Tenants now hold the upper hand, while landlords often accept rental yields below their mortgage costs, a sign of deeper market weaknesses, she said. She cautioned against the practice of setting rental rates solely to cover mortgages, calling it a strategy used by speculative rather than professional landlords. "Rental yields should not be pegged to cover mortgage costs. This is normally practised by speculative landlords, not professional landlords. Speculative landlords artificially inflate the rental market by wanting to cover their mortgage payments, rather than deriving the price of rentals based on the liveable conditions of the homes supplied," she said. She noted that in any mature market, rental trends serve as a litmus test for real demand. Units that can't fetch viable rental rates often reflect oversupply, pricing mismatches, layout inefficiencies, or poor supporting infrastructure. "We must find a way to extract more information about rental prices for analysis. One method is to formalise the rental market with a Rental Tenancy Act. Then, we can access and monitor the rental market to protect the interests of landlords and tenants," she said. She also raised concerns over Joint Management Bodies (JMBs) enforcing "minimum rental rates" to preserve property values, a practice that, while legal, can distort real demand and limit affordability. While framed as a move to preserve property value, critics argue this amounts to cartel-like behaviour that artificially props up prices, hurting owners who need rental income and distorting market signals. "If such practices are indeed happening, they obscure the true softness in rental demand and delay the price corrections needed to make properties accessible to genuine end-users. What are the implications for prospective buyers, investors, and policymakers? "Unfortunately, the values or the opportunistic behaviour of people become institutionalised in the JMB's house rules. That is the democratic disadvantage of consensus, as stipulated in the Strata Act, because it calls for voting on any house rules, and the majority wins. "Currently, most collective actions are for profiteering and not catering to individual plights nor the common good of the less advantaged in the group. Such is the state of our value system. However, distressed individual unit holders could try to negotiate the house rules of the majority by invoking their claim on property rights to the COB." To address the oversupply of high-rise units that fail to match demand, she urged the Housing Ministry (KPKT) to monitor the market using robust housing indicators, such as rent-to-income and price-to-income ratios. "Housing is viewed as both an asset and a shelter. If housing is viewed as an asset-based income, then the CAGR of household wages will never be commensurate with the rapid price escalation of housing as an investment. Therefore, slower capital appreciation is good for the general affordability of all first-time home buyers. She highlighted the conflicting interests in the market, between homeowners, investors, professional landlords, and those seeking affordable shelter. Indicators like the rent-to-income ratio are vital for shaping targeted policies, such as when and how to transition people from public to private rentals. Suraya stressed the importance of promoting both renting and ownership as viable choices but warned that affordability must come first. Speculative activity, particularly in the mid-income housing segment, is damaging the market's long-term sustainability, she said. Suraya said tackling the growing imbalance in the property market requires inclusive dialogue among all key stakeholders, including KPKT, local councils, town planners, Rehda, the National House Buyers Association, the National Property Information Centre (Napic), auctioneers, secondary market specialists, economists, and urban policy researchers. "It is not about who leads and who adopts, but more about building a consensus for the overall 'collective or common good'. This might mean that we need to seriously discuss the housing sector's objectives for all types of diverse interests." Is the property glut worse than it seems? While NAPIC data reports tens of thousands of unsold completed units, the figures fall short of capturing the full extent of Malaysia's housing oversupply, according to Tan Wee Tiam, executive director of Olive Tree Property Consultants. Notably absent are under-construction units with little buyer interest, also known as "shadow inventory", and vacant purchased units that remain unoccupied, adding to supply without meeting real housing needs. Tan noted that the overhang is largely concentrated in the RM500,000 and above segment, far beyond the affordability of most Malaysians. Meanwhile, genuine demand persists in the sub-RM300,000 range, but these affordable units often lack adequate connectivity, infrastructure, and amenities. Aggressive sales tactics, such as rebates, furnishing packages, and deferred payments, may artificially boost take-up rates, masking the true health of the market and distorting price signals, he told Business Times. "Napic data merely gives macro data on the overhang figures and value. We believe it is more useful for Napic or another centralised data centre to collate data on all the sold units when a caveat is lodged, buyers nationalities and other essential information. "Prices, type of property, built-up area, etc., will be crucial for developers and the prospects to better understand the true picture of the property market in a timely manner. Identities of the vendors and purchasers should be provided so that we can know whether they are related party transactions," he said. Tan said that disclosing buyer nationalities can shed light on the real extent of foreign interest, helping distinguish genuine international demand from market hype. Furthermore, he said that understanding whether units are owner-occupied or investor-held (and possibly left vacant) is vital for assessing true occupancy trends. Such transparent, granular data would not only enhance market insights for developers and policymakers but also empower buyers and investors to make more informed decisions in an increasingly opaque landscape, he said. Tan believes that property is still a viable investment for the average Malaysian. He said that property has long been regarded as a cornerstone of wealth creation in Malaysia, but evolving market dynamics have raised critical questions about its viability for the average investor. He noted several factors reshaping the landscape. "Wages haven't kept pace with rising home prices. Malaysia's median house price is now about five times the median annual income, well above the affordability benchmark of 3.0. Persistent oversupply in the mid- to high-end segment has led to depressed rental yields, often in the range of just 2 per cent to 4 per cent, which may not even cover mortgage repayments and maintenance costs. "Tighter lending conditions and rising interest rates have further limited access to home financing, especially for younger and lower-income groups. As a result, many younger Malaysians are diversifying into alternative investment avenues such as Real Estate Investment Trusts (REITs), exchange-traded funds (ETFs), and digital platforms offering robo-advisory services, which often promise better liquidity, lower entry costs, and less risk exposure." Still, he said property investment is not entirely off the table. It remains a viable long-term asset class for those who conduct careful due diligence, understand demand patterns and local market conditions, adopt a realistic investment horizon, and are prepared to start small and scale up gradually. Tan noted that timing also plays a critical role.
Singapore Law Watch
18 hours ago
- Business
- Singapore Law Watch
‘Long overdue': Experts welcome advisory against private-sector use of NRIC numbers for authentication
'Long overdue': Experts welcome advisory against private-sector use of NRIC numbers for authentication Source: Business Times Article Date: 27 Jun 2025 Author: Sharanya Pillai & Therese Soh Government to work with regulated sectors such as finance, healthcare and telecommunications to develop sector-specific guidance. Urging the private sector to stop using NRIC numbers for authentication is a timely and pragmatic move to strengthen data security, industry players told The Business Times. On Thursday (Jun 26), the government released an advisory telling private-sector organisations to move away from using full or partial National Registration Identity Card numbers to authenticate individuals 'as soon as possible'. The government is also working with regulated sectors – such as finance, healthcare and telecommunications – to develop sector-specific guidance in the coming months. 'This is a sensible move and long overdue. Using NRIC numbers for authentication has always been a weak security practice,' said Bhargav Sosale, data protection officer at medtech company Remidio. He noted that NRIC numbers are more like usernames than passwords, being 'static' identifiers that are used widely across institutions from banks to healthcare providers. '(That) ubiquity is precisely what makes them unsuitable for authorisation,' he said. Even the use of partial NRIC numbers – such as the last four digits – could be dangerous, noted Pang Tzer Yeu, chief information security officer at Red Alpha Cybersecurity. The risks are also high when NRIC numbers are paired with other easily obtainable information such as one's date of birth, noted Gerry Chng, head of cyber at KPMG in Singapore. Steven Scheurmann of cybersecurity company Palo Alto Networks sees Singapore's move as a 'significant step' towards bolstering digital safety, especially as identity theft and impersonation tactics grow more complex. He called on organisations to adopt stronger authentication methods such as complex, unique passwords or multi-factor authentication (MFA). Other options include biometric verification and security tokens. 'These methods offer significantly higher resistance to impersonation and fraud, and ultimately help build trust in digital services,' said Scheurmann, who is Palo Alto's regional vice-president for Asean. Verification through the Singpass app is another tool that some organisations are already tapping, noted Red Alpha's Pang. 'Many companies have already moved away from using NRIC, but there are a few sectors where I still see it being prevalent,' he said, citing the insurance sector as an example. For players that still rely on NRIC numbers for authentication, the government advisory 'should be a wake-up call', said Sosale. Industry reactions Industry players that BT reached out to said that they would work with the authorities on the matter. Association of Banks in Singapore director Ong-Ang Ai Boon said that the industry is exploring 'alternative authentication methods in line with today's advisory'. She noted that NRIC numbers alone cannot be used for financial transactions such as payments and funds transfers. However, 'there are limited non-transactional circumstances where NRIC numbers are used for authentication, such as to open encrypted documents sent by e-mail', she said. A spokesperson for AIA Singapore said that the insurer has moved away from relying solely on NRIC numbers for authentication. 'AIA Singapore only collects full or partial NRIC numbers when it is necessary to establish or verify an individual's identity to a high degree of accuracy,' said the spokesperson, noting that this is in line with Personal Data Protection Act (PDPA) guidelines. The insurer also uses MFA for more secure access to online services. Verification processes are also in place at human-assisted customer service touch points. 'We take data security seriously and will continue to ensure all our data collection processes adhere to PDPA guidelines,' the spokesperson added. Separately, Singtel told BT that it adheres to the present guidelines on the use of NRIC for authentication. 'We will wait and review any new guidelines from the (Infocomm Media Development Authority) before assessing any potential impact to our operations,' said a spokesperson. Fellow telco M1 told BT that it uses NRIC to only identify customers, and not to authenticate them. Hospital operator Raffles Medical Group noted that it relies on NRIC numbers as a unique identifier for patients during admission, registration and billing. The company 'will continue to take guidance from the Ministry of Health regarding the use of NRIC numbers for the verification of our patients' identity', a spokesperson said. Data privacy hit the spotlight last December, after a furore over the disclosure of full NRIC numbers on the Accounting and Corporate Regulatory Authority's Bizfile portal. The government had plans to change the practice of masking NRIC numbers, but the Bizfile portal had run ahead of that intent, the Ministry of Digital Development and Information said at the time. Source: The Business Times © SPH Media Limited. Permission required for reproduction. Print
New Straits Times
2 days ago
- Automotive
- New Straits Times
MCE earnings more than double in Q3 despite slight revenue dip
Business Times KUALA LUMPUR: MCE Holdings Bhd's net profit for the third quarter ended April 30, 2025, jumped 151 per cent year-on-year to RM6.08 million, driven by a sharp increase in other income and lower raw material and employee costs. In a filing with Bursa Malaysia, the group said it recorded other income of RM876,000 compared to RM265,000 a year earlier, while raw material costs fell to RM18.3 million from RM19.4 million. Employee benefits expenses also declined to RM7.64 million from RM8.12 million previously. Quarterly revenue, however, slipped 1.6 per cent to RM36.8 million from RM37.4 million, primarily due to weaker demand for certain automotive parts. MCE attributed the stronger bottom line to improved operational efficiency and higher interest income, in addition to cost savings. Group managing director Goh Kar Chun said the results reflected the company's resilience amid a challenging environment. "We continued to deliver a solid performance amidst an evolving yet challenging operating environment. Our results reflect the strength of our fundamentals and the discipline of our team as we head into the final quarter of the financial year," he said in a statement. Earnings per share rose to 4.43 sen from 1.96 sen. No dividend was declared for the quarter under review. For the nine-month period, MCE paid a total dividend of RM1.85 million. As at April 30, the group's cash and bank balances stood at RM19.65 million, up from RM15.83 million at end-July 2024. Short-term investments rose sharply to RM89.64 million from RM33.66 million, bringing total current assets to RM149.3 million. Total liabilities increased to RM74.3 million from RM61 million, mainly due to higher term loans, which more than doubled to RM22.4 million from RM12 million previously. Looking ahead, MCE expects future earnings to benefit from the launch of Perodua's first electric vehicle by year-end, for which it will supply key components including multimedia units and the Advanced Driver Assistance Systems (ADAS). The group noted it has been appointed to supply a wide range of parts for the model, including multimedia display units, instrument panel clusters, switches, interior lighting, and ADAS modules. Its upcoming Serendah manufacturing plant, slated to begin operations by end-2025, is also expected to boost production capacity and support next-generation automotive technologies. Goh said the new facility "will significantly increase MCE's capacity, enabling it to scale up its offerings in high-value automotive electronics." The Serendah plant would also support MCE's diversification into non-automotive contract manufacturing through a joint venture with Hong Kong-based Sounding Industries Ltd and enhance its presence in the ADAS segment via a collaboration with Nanjing Chuhang Technology Co Ltd. "Looking ahead, MCE remains focused on driving sustainable long-term growth by strengthening our technological capabilities and capturing emerging opportunities across Malaysia and key export markets," Dr Goh said.
New Straits Times
4 days ago
- Business
- New Straits Times
Putrajaya Holdings to open tenders for RM4bil Kota Madani project in Q3
PUTRAJAYA: Putrajaya Holdings Sdn Bhd is set to launch the tender process for the RM4 billion Kota Madani urban development in Precinct 19, Putrajaya in the third quarter of this year. Putrajaya Corporation president Datuk Fadlun Mak Ujud told Business Times that the 41.28-hectare development will be carried out under a build, lease, maintain and transfer (BLMT) model, framing it as a long-term, asset-backed initiative aligned with national urban development goals. He said the project's estimated development cost stands at RM4 billion, although the final figure will be confirmed once implementation begins. "This is a government housing project. We're not selling the units, but leasing options may be considered if there is demand," Fadlun added. He said Kota Madani goes far beyond traditional residential development, describing it as a high-impact, strategic initiative designed to reinforce Putrajaya's position as a world-class, people-centric city under the government's Madani framework. Fadlun said Putrajaya Holdings was appointed as the master developer of Kota Madani based on its extensive experience and proven track record in developing Putrajaya, Malaysia's largest and most ambitious urban project to date, which now encompasses over 22,000 residential units. He said a transparent open bidding process will be launched in the coming months, inviting qualified contractors and service providers to participate. Contract awards will be merit-based, with a strong emphasis on technical capability, integration of sustainable solutions, and alignment with the township's smart city and community-focused vision. The ground breaking of Kota Madani is scheduled for this Thursday, officially kicking off a transformative urban initiative aimed at elevating the standard of living in Malaysia's administrative capital. Kota Madani will offer 10,000 high-density vertical housing units built in three phases, accommodating up to 35,000 residents upon full completion. It will also feature artificial intelligence-driven systems, advanced digital infrastructure, and a suite of green mobility options to support a low-carbon lifestyle. The project's first phase (1A and 1B), which comprises 3,000 high-density residential units and an eight-storey school, is targeted for completion by the end of 2027. Kota Madani is designed to serve as a model township under the government's Madani framework, integrating smart technologies, green infrastructure, energy-efficient systems, and essential public services into a cohesive urban ecosystem. Key components of the township will include government quarters, healthcare facilities, schools, financial institutions, and green mobility solutions, all within walkable, self-contained residential precincts, according to Malaysian Institute of Planners president Datin Mazrina Abdul Khalid. The township will be anchored by the CHASE vision (clean, healthy, advanced, safe and eco-friendly), a policy framework designed to transform Malaysia's federal territories into liveable, sustainable cities. This vision emphasises environmentally responsible practices, digital integration, and inclusive infrastructure as foundations for improved urban quality of life. Mazrina said the township's masterplan draws inspiration from Malaysia's architectural heritage, merging cultural identity with modern urban design to create a distinctive living environment. "Kota Madani goes beyond conventional housing. It is a forward-looking model for smart, sustainable, and inclusive development," she said. Mazrina said complementing residential areas, critical amenities such as a health clinic, fire station, police station and mosque will be located nearby, reinforcing the township's focus on accessibility, safety and holistic well-being. She noted that the project will feature green elements, including energy-efficient initiatives, which form the core foundation of the Kota Madani development. With its strong policy alignment, future-ready design, and strategic execution model, Kota Madani is poised to become a benchmark for urban development not only in Putrajaya but across Malaysia.
New Straits Times
5 days ago
- Business
- New Straits Times
Bitcoin rebounds after weekend sell-off driven by 'whale' liquidation moves
S. Birruntha KUALA LUMPUR: The sharp weekend sell-off in cryptocurrencies may have been intensified by strategic selling from large holders, or "whales", aiming to trigger liquidations in the derivatives market. Tokenize Xchange founder and group chief executive officer Hong Qi Yu said the sudden dip, which followed reports of a United States strike on Iranian nuclear sites, created an opportunity for such players to exploit market panic. "Whales may have taken advantage of the panic to trigger a liquidation cascade," he told Business Times. Bitcoin and major altcoins fell sharply over the weekend amid rising geopolitical tensions, erasing recent gains and sending the broader crypto market into the red. However, the correction proved short-lived. The market rebounded late Sunday, with Bitcoin recouping much of its losses as fears of a broader conflict subsided. Hong remains optimistic about the market's near-term outlook, viewing the pullback as temporary and not the start of a prolonged downtrend. "I remain bullish on the overall crypto market, with Bitcoin leading the way. The US$100,000 level appears to be well supported, and I expect to see a recovery within the next week, with the possibility of Bitcoin reaching a new all-time high soon," he said. Hong emphasised that the view is his personal opinion and not financial advice. He added sharp price swings are not unusual during periods of geopolitical tension, citing Bitcoin's performance during the start of the Ukraine-Russia conflict. "For instance, when the Ukraine-Russia war broke out, Bitcoin fell from around the US$45,000 level to the US$30,000 range before staging a relief rally," he said. Industry players believe the weekend volatility is unlikely to derail the broader bullish trend, which remains supported by long-term adoption and institutional interest in digital assets. SPI Asset Management managing director Stephen Innes said the sell-off reflects classic flight-to-safety behaviour, where "when bombs drop, liquidity gets pulled." "Crypto, still seen as risk-on, got hit alongside equities," he said. "Historically, crypto hasn't been a reliable wartime hedge — it trades more like high-beta tech than digital gold during shock events. "With volatility elevated and macro uncertainty high, more downside's possible if the conflict escalates — but expect dip buyers to circle fast if tensions cool." Another industry observer said the crypto market tends to react sharply to conflict-related headlines, often mirroring the broader market's risk-off behaviour. However, he noted that in previous geopolitical crises, Bitcoin and other digital assets have also shown resilience, often recovering faster than traditional equities. "This is partly due to crypto's decentralised nature and its growing perception as a hedge against fiat currency instability over the medium term," he said. "But still, macro factors such as inflation trends, interest rate expectations, and institutional inflows remain more influential in shaping the crypto recovery narrative. "If geopolitical tensions stabilise or the market begins to price in their impact, we could see crypto regain momentum, especially if Bitcoin holds above key psychological levels," he added. Market analysts said while crypto markets often suffer steep declines during times of war or geopolitical escalation, their reactions are not always linear. Assets like Bitcoin and Ethereum typically fall in the immediate aftermath of such developments, reflecting a broader wave of investor risk aversion. Both tokens recorded notable losses following the recent reports of US military action targeting Iranian nuclear sites. This behaviour reflects crypto's continuing status as a high-risk asset class, similar to equities, which investors tend to offload during periods of heightened uncertainty. During such times, capital often rotates into traditional safe havens such as US Treasuries, gold and the US dollar, assets perceived to offer stability in volatile environments. As a result, cryptocurrencies don't always serve as a reliable hedge in the short term. However, if the situation stabilises or the market adjusts, crypto assets have often shown an ability to rebound. One recent example was the partial recovery seen in Bitcoin following heightened tensions between Israel and Iran earlier this year.
