Property Overhang seen not Critical

Consultancy slams report on sector as 'misleading, sensational'

Property consultancy firm Zerin Properties said report on property sector by a counterpart was both “misleading” and “sensational”.

The managing director of CBRE | WTW, Foo Gee Jen says that the reasons of overhang mostly by the oversupply of high-rise units, mainly serviced apartment and small office, home offices (SoHo) units.

Zerin mentioned that Kuala Lumpur is the main driving forace of the recovery of the property market. Based on simple extrapolation, the sales of 2,500 units a year, if there were no new launches, this would be absorbed in a year.

Commercial land has a higher value than residential land. Developers, in an attempt to lock in sales during an era of escalating prices, reduced the built-up areas of the units to give a veneer of affordability.

Therefore, he also said that we should focusing and highlighting on – instead of sensationalizing statements – should be the need for bolder measures from the government.

He also said he is a strong believer of laissez faire but “in an economy that is imperfect, balancing policies are also required.” Therefore, bumiputra quotas, reducing the minimum price for foreign purchases and ramping up discount policies will help the industry.



Source: Thestar @ Biz Property