Putrajaya told to copy Barcelona in solving property overhang | Malaysian Institute of Estate Agents

Putrajaya told to copy Barcelona in solving property overhang


PETALING JAYA: An opposition politician has urged the government to consider emulating the Spanish city of Barcelona in addressing Malaysia’s property overhang, saying it would benefit low-income earners.

Raja Kamarul Bahrin, a former deputy housing minister, described Barcelona’s approach as “a most welcome solution” to cater to the lower income group because there are no new units being built for them now.

Barcelona’s housing department recently told property companies the city would take possession of their vacant units at half the market rate and lease them to the lower income group if they could not find tenants within a month.

Raja Kamarul told FMT it was a good idea considering the “worldwide collapse” of the housing market.

Raja Kamarul Bahrin

While conceding that it would be difficult to get property developers on board, he spoke of the approach as having two benefits: Increasing the stock of affordable housing and saving the government money on building such houses.

“It would be cheaper for the government because building costs have gone up a lot,” he said. “Why not pick up buildings that are already there?”

But two experts on the housing industry disagree.

Noor Rosly of Universiti Malaya, who has written extensively about affordable housing in Malaysia, said most properties in the property overhang would qualify as “very high-end” and low-income earners could not afford the maintenance costs.

Noor Rosly

“Usually, the properties are in prime areas. If the government buys these properties and gets people from the B40 category to stay there, I don’t know if they can survive,” he told FMT.

He said the onus was on the developers to move unsold units to reduce the overhang. “The government shouldn’t interfere. This is the developers’ problem. We shouldn’t use taxpayer money to overcome it.”

According to Michael Kong, president of the Association of Valuers, Property Managers, Estate Agents & Property Consultants in the Private Sector Malaysia, the Barcelona solution would not address Malaysia’s problem.

Michael Kong

“The situation here is different,” he told FMT.

He said it was not by choice or design that properties in Malaysia were vacant. “It is a case of overbuilding and, more often than not, in undesirable locations.”

Kong said it was not a matter of developers being unwilling to lease their properties but a lack of tenants had caused the discrepancy.

“Penalising landlords or owners for not being able to rent out their vacant units seems unfair and punitive in nature,” he said, adding that this would amount to rubbing salt into their wounds.