Stock of unsold homes in Malaysia grows amid housing glut

File picture of the city skyline of Kuala Lumpur. The number of unsold housing units in Malaysia rose to 146,196 units at the end of March. PHOTO: ST FILE

KUALA LUMPUR - The housing glut in Malaysia is worsening as more units remain unsold, with 80 per cent of these priced above RM250,000 (S$82,300), the central bank said in a statement on Wednesday (Sept 26).

Homes sold above this price are seen as being "unaffordable" to most of Malaysia's workers.

The number of unsold housing units around the country rose to 146,196 units at the end of March. Bank Negara Malaysia did not give a comparative figure.

The central bank had previously said that unsold residential properties totalled 130,690 units at the end of March last year.

"Imbalances observed in the property market continue to persist," Bank Negara said in its latest half-yearly statement on the country's financial outlook posted on its website.

"Excess supply of office space and shopping complexes is also expected to persist as vacancy rates deteriorated further in the first quarter of 2018," it added, without giving details.

On the plus side, the central bank said the banking sector has been prudent in dishing out housing loans.

"Risks from household sector exposures continue to be mitigated by prudent underwriting and loan affordability assessments by financial institutions and sound risk management practices.

"New household borrowings remained of high quality.

"About three-quarters of new loans approved were to borrowers with debt service ratios of less than 60 per cent," Bank Negara said.

There also remains strong demand for what is termed as "affordable housing" in Malaysia - homes sold by government agencies.

The central bank said "sustained demand for affordable housing, particularly from first-time home buyers and prudent underwriting practice in lending to the property market and related sectors are expected to mitigate risks of a broad based price correction".

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