PEPS: Property overhang caused by lack of information

PETALING JAYA (Nov 24): The major issue that has led to the current property overhang levels across the residential and commercial sectors boiled down to a lack of data, said the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia (PEPS).

The absence of timely and accurate data has clouded the judgement of the property industry’s stakeholders, it said in a statement today.

For the developers, scarce, inaccurate and not timely data has led to indiscriminate building especially of the high-end and unaffordable houses, said the statement.

“For the local authorities, poor coordination amongst them on data of the development approval within the same neighbourhood resulted in duplication of same developments within the same neighbourhood.

“On the buyers/investors, most of the purchases or investments were done blindly based on herd instinct,” it said.

Moreover, the other issues that contribute to the overhang include delays in gazetting local and structure plans, mismatch of product and location, high building and compliance cost, and artificial demand.

The association reiterated again that the property overhang issue is a complex one that involves several parties and industries, such as the federal and state governments and local authorities, the governing bodies and banks that make up the finance eco system, developers, and buyers or investors.