Malaysia's central bank warned on Friday (Nov 17) that unsold residential properties are at their highest level in a decade, with the largest oversupply found in southern Johor state.
Bank Negara Malaysia (BNM) said the glut is caused by developers selling these units at above RM250,000 (S$81,500), beyond what most Malaysians could afford.
BNM on its website on Friday said there were 130,690 unsold units at the end of March this year, with 83 per cent priced at above RM250,000. It said 61 per cent of the unsold units were high-rise apartments.
"Supply-demand imbalances in the property market have increased since 2015. Unsold residential properties are at a decade high, with the majority of unsold units being in the above RM250,000 price category," the central bank said.
The issue of high home prices is being tackled by Prime Minister Najib Razak, who is expected to call for the general election in the next six months.
In the 2018 Budget, Datuk Seri Najib announced a RM2.2 billion allocation to build 248,000 more affordable houses.
BNM projected that one-in three offices will be vacant by 2021, and sees 140 new malls entering the market by that year.
In March, The Malaysian Insight news site reported that there were 255 shopping centres in Kuala Lumpur and its surrounding districts alone, with 14 more set to open this year.
The central bank suggested a single agency to be set up to handle "affordable housing". Such homes are usually priced at RM150,000 and below, and are built by several agencies under both the federal government and various Malaysian states.
In a newspaper column published Friday, Datuk Seri Azman Ujang, chairman of national news agency Bernama, said Malaysia could learn from Singapore's example in its HDB (Housing Development Board), a single authority to efficiently handle public housing.
In Malaysia, the steady rise in landbank prices - fed by stable economic growth - has led developers to build condominiums at ever-increasing prices even though salaries have failed to catch up.
BNM in its statement said: "This (glut) situation could worsen if the current supply-demand conditions persist. Within the country, Johor is poised to have the largest property market imbalances (highest number of unsold residential properties and potentially the largest excess supply of retail space)."
"As such, it is timely for all parties to act now to mitigate any potential risks to macroeconomic and financial stability," it added.