Developers Urged To Stop Building Serviced Apartments In JB

The desire to capitalise on rich foreign buyers has left the state with at least 16,000 unsold properties amounting to billions. Buildings erected were left vacant with just a few units taken up, reported The Malaysian Reserve.

Bruce Lee, property consultant at VPC Realtors (JB) Sdn Bhd AsiaPacific, said while Johor does have a large supply of land suitable for development, it does not have enough demand or population to acquire the available properties.

“Properties in Johor were not built based on current demand, but based on speculations. They assume that more people will migrate to the state, including foreigners. But when those did not happen, the units are left unsold.”

“The local demand in the state is not able to absorb the supply, and I don’t think the population can meet the supply any time soon.”

According to the National Property Information Centre, Johor made up more than 30 percent of the total overhang problem in Malaysia in the first quarter of 2019.

Residential properties accounted for the bulk of Malaysia’s overhang at 32,936 units worth RM19.96 billion as at March 2019.

The second-largest contributor to that figure is serviced apartments with 13,013 units amounting to RM10.18 billion.

Johor currently has 16,844 in overhang units worth RM14.44 million out of a total of 54,078 units valued at RM37.23 billion in the country.

In contrast, Selangor and Sabah only have 8,136 and 1,483 overhang units respectively despite having more population than Johor.

According to Lee, JB has the highest number of completed but unsold units, while other districts in Johor do not face a severe overhang issue.

“Stop building serviced apartments in JB until the demand can absorb the supply,” he said.

Source: PropertyGuru