Include vacant property in market analyses

The National Property Information Centre (Napic) has said that the number of unsold homes in Malaysia reached a new high of 30,115 units, amounting to RM19.54 billion in 3Q18.

The figure represents the number of unsold homes completed nine months from CCC. It excludes residential properties built on commercial land like serviced apartments, small-office home-office (SoHos), etc.

A property consulting firm has also said that overhang stood at 43,219 units worth RM29.47 billion in the same period. This includes serviced apartments and SoHo units.

All of the above only represent property overhang, not market supply.

The above figures only cover the developer’s stock and do not cover vacant units already sold to individuals or companies. The real ratio that represents the demand and supply situation should be residential vacancy rates (RVR).

Unfortunately, we don’t have RVR in Malaysia. I believe it is timely for Napic to provide the information on RVR instead of just overhang numbers.

RVR is the percentage of all units in a particular market that are unoccupied at a particular time. Vacancy rate is calculated by multiplying the number of vacant units by 100, and then dividing it by the total number of units in the building.

Napic should provide RVR on national, state, city or location basis just like other developed countries such as the US, Singapore and Australia.

It will help developers, banks, property consultants, homebuyers and investors to make better decisions by understanding the current demand and supply situation.

An RVR above 7% is considered high, and it is alarming for the market to add on supply. Low vacancy rates generally mean that the real estate market performance of an area is good. They are an indication that a strong demand for rental real estate units exists. Once we gather data over several years, we will able to analyse the market situation better in terms of demand and supply.

RVR can be obtained from a utility company like TNB, to provide data on the zero usage of utility bill units on a monthly basis. Napic should compile and publish the same on a quarterly basis for the public to analyse the situation.

For a better Malaysia, we should start providing more information on a timely basis so that the stakeholders can react accordingly.

See Kok Loong is executive director of Metro Homes Realty Bhd and deputy president of the Malaysia Institute of Professional Estate Agents and Consultants.

The views expressed are those of the author and do not necessarily reflect those of FMT.