YESTERDAY (July 7), the Real Estate and Housing Developers’ Association Malaysia (Rehda) urged the people to buy homes now rather than later before interest rates rise further.
“Interest rates are rising globally and locally. Right now, people should buy property to help hedge against it and look long term,” Free Malaysia Today reported Rehda acting president NK Tong as saying.
The real estate developer urged buyers to look at long-term benefits of getting a property as overtime, the latter’s prices will soar and lowers the loan-to-value of the debt.
“And this results in the equity of the property rising at a faster rate than the loan repayments, assuming the house value appreciates faster than inflation rates,” Tong added.
However, not everyone was impressed with Tong’s calls and took to social media to criticise the former, accusing him of being insensitive to the people’s plight.
Lawyer-activist Siti Kasim said:
(Your head! People are struggling to put food on the tables and you are asking to them to buy houses? Just because your gang of developers built too many houses and condos, you want us to buy them of you? To make you richer whilst we suffer?)
Echoing Siti Kasim’s sentiments, user Hillary Lee added:
“When warning lights lit up because of overbuilding dah lupa. Just approve.. creating a glut. Market forces decide when the prices down!”
It is to note that Malaysia currently suffers from a property overhang due to excessive supply.
The National Property Information Centre’s noted that the first-half 2021 data indicated a sizeable glut of 57,154 units, valued at RM41.5 bil.
The Sun reported that Datametrics Research and Information as saying that unsold residential, serviced apartments and small office home office units numbered 24,614 valued at RM14.7 bil in 2017.
“In essence, in the last four years alone, the total value of overhang has tripled and the number of units has more than doubled,” the report had stated back then.
Poor planning
On that note, user Alfred Lau said that Malaysia could have mitigated its property overhang issue if developers had created different housing programmes for different segments of the society.
“If we had created different housing programs for the oversupply, would it not had benefited both parties? In the 80s, one storey low cost houses were sold at 45k today it is worth 200k.
“It benefited the people. Instead, they made poorly made ppr today sigh.” – July 8, 2022
Main photo credit: Rehda Institute
