Overhang is not unsold properties yeah. Overhang are properties where the keys have been handed over but the unit remains unsold for the next 9 months. If we bought a new property in 2016 and it needs 36 months to complete, it meant that we will have the keys in 2019. On that day, any unsold unit by the developer will be called unsold units. 9 months later, then these units become overhang units. Get the idea now?
If the overhang numbers kept going up, it may mean two things. One is that supply has been coming in furiously fast. Way faster than demand can keep up. Secondly, those properties may not be what the people want, thus there were no takers. How do we solve such an issue then? Well, we could continue to put in up for sale in the market and continue to reduce the supply and hope that somehow someone would want to buy the property.
Well, here are some views from prominent personalities about the discounts from state governments so that the properties become more attractive to foreigners. Article in thedgemarkets.com . Penang has reduced its price threshold for foreigners by up to 40% in a bid to clear RM2.6 billion worth of overhang units in the state. The revised pricing is now RM1.8 million for landed properties and this was RM3 million previously. It is only for a period of one day or until June 10th 2021.
If the foreigners prefer a stratified property instead, then the ceiling price is now RM800,000 from RM1 million in the island while it is now RM400,000 on the mainland. it used to be RM500,000 threshold for foreigners if they like to buy properties in the mainland. Please do read the article in theedgemarkets in full. It has views from many prominent personalities too.
I do think that Malaysia has a lot to offer when it comes to properties. The only issue I believe is what could we offer beyond just lower property price. Assuming I am a foreigner today, I will not be buying a property in Penang just because it’s cheaper than some other countries. I may buy into Penang if I understand that the cost of living and the quality of living here is comparable to some other countries I may also be evaluating.
I may also buy into Penang if I know that I continue to have accessibility to anywhere I want to go through the 3rd busiest international airport in Malaysia. I may also buy into Penang if I know that I could get a visa which allows me to stay for a long time without the need to leave the country every month just to renew my visa… By the way there are a lot more but you get the idea. State governments need to present this as a package right from the start. This is not just about who is cheaper or cheapest. There are things which many other countries could not provide. As for price, well, let’s understand that RM800,000 is not actually cheap when compared to that country up north… where they offer exotic beaches too… 😛
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