The value of completed and unsold properties from all segments dropped 5.3% year-on-year to RM18.91bil in the first quarter of 2020, despite more units being launched during the period, according to the National Property Information Centre (Napic).

According to Napic, a total of 127,604 units were launched in the first quarter of this year, compared with 120,309 units in the previous corresponding period.

However, the level of unsold units was lower at 29,698 in the first quarter of 2020, compared with 32,936 units in the first three months of 2019.

The bulk of the overhang was contributed by the condominium and apartment units, valued at RM8.12bil. This was lower than the RM8.44bil recorded by the same segment during the first quarter of 2019.

A property consultant said more property units were launched in the first quarter of this year as there was more optimism in the market going into 2020.

“Things were looking optimistic going into 2020, as the property market was still riding on the euphoria of the Home Ownership Campaign (HOC) in 2019. That would explain why more properties were launched and fewer unsold units compared with the previous corresponding period.”

He said market sentiment was seriously affected in March, when the Covid-19 crisis became worse and the movement control order (MCO) was implemented.

“I expect the figures to be worse in the second quarter, ” he said.

To address the overhang problem in the country, the government kicked off the HOC in January last year which is a six-month initiative that eventually got extended until year-end.

A number of initiatives were announced during the period to encourage home-ownership, such as the exemption of stamp duties on residential units priced between RM300,000 and RM1mil.

All the properties at the HOC also came with a minimum 10% discount and stamp-duty waivers on the instrument of transfer and the instrument on loan agreement, as well as additional incentives. The campaign proved successful, having generated total sales of RM23.2bil in 2019, surpassing the government’s initial target of RM17bil.

To tackle the rise in Covid-19 infections in the country, the government implemented the MCO on March 18. On May 4, a conditional MCO (CMCO) was enforced to allow businesses to re-open to recover the economy. The CMCO has been extended to June 9.

An overhang is defined as completed unsold properties certified fit for occupation. The value of completed and unsold properties from all segments stood at RM19.96bil in the first quarter of last year.

According to Napic, Johor retained the highest number and value of residential overhang in the country in the first quarter of 2020 with 5,468 units worth RM4.65bil.

Selangor came second with 4,844 units worth RM4.10bil. Penang recorded 3,043 unsold units worth RM2.55bil, while Kuala Lumpur registered a total of 2,586 unsold units worth RM2.59bil.

Source: TheStar.com.my