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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.
The Sun
a day ago
- Business
- The Sun
Risda Carnival 2025 targets 10k visitors with 60 local delicacies
KUALA LUMPUR: The Rasa Asli Desa Risda Carnival 2025 kicked off today, running until June 30, with organisers targeting over 10,000 visitors. The event features 28 entrepreneurs from 13 states presenting more than 60 types of local culinary delights. Deputy Minister of Rural and Regional Development (KKDW) Datuk Rubiah Wang highlighted the ministry's support for rural entrepreneurs, particularly smallholders under the Rubber Industry Smallholders Development Authority (Risda). 'Programmes like this not only add value in terms of marketing and sales, but also provide a real space to strengthen brands, business matching and market network development for rural entrepreneurs,' she said during the launch at Wangsa Walk. Rubiah noted that many participating entrepreneurs earn between RM5,000 and RM10,000 monthly, with some already recording RM1,000 to RM2,000 in sales on the first day. She expressed confidence in achieving the carnival's RM200,000 sales target. Themed 'Rasa Tulen, Sentuhan Istimewa' (Authentic Flavours, Special Touch), the event blends tradition with creativity, featuring dishes like kek lapis, rendang maman, and gulai temenung. Noorazlina Saramali, a 32-year-old entrepreneur from Beaufort, Sabah, shared her enthusiasm for introducing Sabahan specialties like kelupis and kucong to urban visitors. 'Kelupis is glutinous rice cooked with coconut milk and steamed in the same way as kucong, but kucong has a peanut filling flavoured with shrimp. I want to introduce kelupis to the people of Kuala Lumpur because this food is rarely available here,' she said. Siti Hajar Husnan, 39, from Negeri Sembilan, brought Johor's burasak and lepat loi, typically seasonal treats now available year-round thanks to retort processing. 'Actually, this is a seasonal food, but when we process it using the retort method, it can last up to a year and can be eaten anytime. We also sell it online on Shopee and TikTok, good thing there is always demand,' she said. The carnival also features the RisSMart 24 brand stall by Risda Agri Food Sdn Bhd (RAFI), offering pastries, wagyu skewers, and tom yam bowls. Additional activities include traditional cooking demos, a nostalgia-themed night showcase, and a kids' beauty pageant.
Borneo Post
2 days ago
- Health
- Borneo Post
Stage 4 cancer patient in Batu Kawa keeps working despite pain, receives help from Hope Place
Hope Place representative Mary Vun (left) hands over the food aid to Esan during the recent visit. KUCHING (June 27): Hope Place Kuching is providing basic food aid to a middle-aged couple in Moyan, Batu Kawa, where the husband is battling stage 4 colon cancer. According to the non-governmental organisation (NGO), 55-year-old Tan You Sik was diagnosed with colon cancer in 2021 and had undergone radiotherapy. He is currently receiving chemotherapy treatment. Hope Place said Tan and his wife, Esan Suli, 54, live without children and face mounting challenges due to his deteriorating health. 'Esan tries to earn a living by selling homemade peanut and anchovies snacks. Tan reveals that he is still working,' said Hope Place in a statement yesterday. Tan, who continues to do electrical wiring and driving jobs, often experiences physical pain following each chemotherapy session. 'I don't have any choice. If I still have energy left, I'll continue to work,' he told Hope Place, adding that he relies on a high dosage of morphine to manage the pain. The couple receives RM200 in monthly aid from the Sarawak Social Welfare Department, while church members help contribute towards their rent. Hope Place welcomes all donations to support more families in need. Contributions can be made via Maybank account 511289001160 or the S Pay Global QR code available on its Facebook page. For more information, call Hope Place on 082-505987 or 013-5672775. aid Batu Kawa cancer hope place kuching
The Sun
2 days ago
- Business
- The Sun
Top Glove optimistic on growing demand for gloves, additional sales from US
KUALA LUMPUR: Top Glove Corporation Bhd expects demand for gloves to grow with opportunities to capture additional sales from the United States when there is more clarity on issues surrounding US tariffs. It also said the tariff imposed by the US on China products is unlikely to be lower than Malaysia's. Managing director Lim Cheong Guan said the group's diverse portfolio is an advantage. It can offer a range to meet customers' preferences and pricing requirements while acknowledging competition in other regions. 'The final tariff decision by the US government will provide much-needed visibility for both manufacturers and customers,' he said in the group's virtual results briefing for the third quarter ended May 31, 2025 (Q3'25) today. 'Meanwhile, to mitigate the impact of US dollar volatility on profitability, we will maintain a consistent hedging policy on a month-to-month basis,' he said. Lim also said quarterly fluctuations in average selling prices (ASP) are to be expected, influenced by raw material cost volatility, among other issues. Nonetheless, market conditions are expected to stabilise over time, he said. Overall, Lim said the group has a positive outlook for the glove industry and is confident of delivering stronger results in the coming quarters. On the cost front, Lim said if raw material prices decline gradually, this would help ease some of the pressure from price competition. At the same time, improvement in utilisation – 65% in June – is expected to rise in the coming months. This will help to optimise cost and boost competitiveness in the challenging market environment. The 2% mandatory Employees' Provident Fund contribution for foreign workers would cost the group RM200,000 a month, he said. 'If you look at it in terms of average selling price, it will be 0.1% of the ASP,' said Lim. For Q3'25, Top Glove saw its net profit decline to RM34.75 million from RM50.67 million a year ago. Revenue was higher at RM830.25 million versus RM636.87 million in Q3'24, it said in a filing with Bursa Malaysia. Lim said the group's Q3'25 performance was impacted by pronounced headwinds, lower ASP, heightened competition, coupled with cost savings pass-through. For the nine months ended May 31, 2025 (9M25), Top Glove returned to the black with a net profit of RM70.5 million against a net loss of RM58.23 million a year ago. Revenue was RM2.59 billion against RM1.68 billion in the same period last year. In 9M25, sales revenue surged 55%, accompanied by a 65% increase in sales volume compared with 9M24. – Bernama
Focus Malaysia
2 days ago
- Business
- Focus Malaysia
Malaysian homebuyers redefine value in a more selective market
AT first glance, Malaysia's residential property market may appear quiet, but beneath the surface, a meaningful transformation is underway: a fundamental shift in how Malaysians approach property ownership. Today's buyers are intentional, value-focused, and sharply attuned to economic signals. The optimism of past years has given way to a more measured mindset shaped by global volatility, domestic caution, and a widening disconnect between asking prices and buyer expectations. This is not a retreat from the market; it is a recalibration. Malaysians are still buying, but with greater purpose and scrutiny. Supply expands, buyer expectations refocus According to the Property Market Q1 2025 Snapshots by National Property Information Centre (NAPIC), residential construction jumped by 30.2% year-on-year, an expression of developer confidence. Yet, transaction volume and value fell 6.2% and 8.9%, respectively, highlighting a growing misalignment between supply and demand. This shift is not rooted in economic weakness. With policy interest rate steady at 3.0% and inflation down to 1.4% in April, Malaysia's fundamentals remain stable. But instead of acting on optimism, buyers are choosing caution. It is a clear signal: affordability today is no longer just about price; it's measured by perceived value. Bridging the price gap through buyer alignment Differences between current residential offerings and evolving buyer preferences are becoming more noticeable across key regions. In Kuala Lumpur, high-rise homes took the biggest hit, with prices dropping 7.3% quarter-on-quarter, which was the steepest decline among property types. According to NAPIC, overhang grew 14.8% year-on-year, with unsold units mostly being condominiums priced between RM200,000 to RM300,000. However, data from PropertyGuru Malaysia for April 2025 indicates that the condominium market is stabilising towards an equilibrium, showing only a slight month-on-month decrease in demand of 0.7% for condominiums. Selangor, meanwhile, tells a different story. According to NAPIC data, the price gap is widening in the apartment and serviced residence segments, but savvy buyers remain active when value aligns with expectations. Overhang fell nearly 40% year-on-year, signalling strong movement in well-priced, practical homes. Across most segments, caution dominates mark-to-market activity amid ongoing economic uncertainty. Penang continues to attract attention, especially in the condominium segment. PropertyGuru Malaysia's April 2025 data showed a 9.1% increase in condominium listing views, driven by infrastructure developments such as the LRT Mutiara Line. However, NAPIC data indicates a decline in transactions for homes priced above RM1 mil, reflecting growing resistance to premium price points. Johor is shaping up as a market where rising prices are starting to test buyer patience. NAPIC reports an 8.7% year-on-year increase in high-rise prices for Q1 2025. Correspondingly, PropertyGuru Malaysia's April 2025 data shows a 19.5% year-on-year decline in interest for serviced residences, with overall views for non-landed homes also trending downward. Like the non-landed property types, demand for landed property types also decreased YoY. The rise of the value-conscious buyer A dip in the demand index does not mean buyers have disappeared. In fact, they are just more selective. According to April 2025 data from PropertyGuru Malaysia, apartment views fell 14.1% while semi-detached homes dropped 21.4% year-on-year. Yet, property types that strike a smart balance between price, location, and lifestyle are defying the trend. Some even gain traction. Selangor is a standout. Terraced homes continue to outperform, with demand rising 2.7% year-on-year and overhang falling 40%, according to NAPIC. This points to a healthy alignment between supply and real buyer appetite. In Penang, condominium interest surged 9.1% year-on-year, buoyed by better connectivity and more competitive pricing, highlighting the positive impact of infrastructure upgrades like the upcoming LRT Mutiara Line. Meanwhile, in Johor, the story is more nuanced. NAPIC data shows a 3.2% year-on-year increase in the All-Housing Price Index, led by high-rise and terraced homes. However, the price growth appears to be dampening sentiment, with declining demand suggesting that affordability concerns are weighing buyer decisions. These shifts tell us something important: buyers haven't exited the market. They are just more focused on finding real value. Developers are re–imagining value in real time As buyers become more measured and data-driven, developers are also evolving their strategies to stay aligned. The traditional playbook of driving volume or focusing solely on premium segments is being rebalanced to meet a market increasingly shaped by value-conscious demand. Success now lies in realistic pricing, particularly in the resilient RM500,000 to RM800,000 bracket. Homes within this range continue to see steady interest, especially when paired with strong connectivity and well-designed, liveable environments. Transit-oriented developments and communities with integrated green spaces are emerging as long-term favorites among buyers. Equally important is understanding the new pace of decision-making. Buyers are being more deliberate, investing time in research, comparisons, and consultations before committing. In this era of intentional ownership, developers who align with value-driven demand through realistic pricing, livability, and accessibility are well-positioned to thrive. ‒ June 26, 2025 Kenneth Soh is the country manager – Malaysia for PropertyGuru & iProperty. The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.
