The Residential Property Overhang Problem and Its Impacts towards Malaysia’s Property Market

Liew, Chun Chi (2023) The Residential Property Overhang Problem and Its Impacts towards Malaysia’s Property Market. Final Year Project (Bachelor), Tunku Abdul Rahman University College.

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Abstract

Malaysia’s property industry is an important industry that has promote the country’s economic development which brought the country with income, opportunities and investment. Basically, the industry is divided into 3 categories which are residential, commercial and industrial properties. However, as the total value of the residential sector increases year by year, it brings another issue. The number of overhang residential properties in the country has increased significantly. As a result, it will further lead to other side effects such as pre-occupancy obsolescence, high maintenance costs, high energy costs, the abandonment of properties and houses and others. Hence, to minimize the serious overhang residential property problem, the research study will be carried out to identify the factors causing residential property overhang in Malaysia and the negative impacts of residential property overhang towards Malaysia’s property market as well as recommend the possible solutions to minimise the residential property overhang in Malaysia.The methodologies that will be applied for this research is to start with the outline of literature review to identify the factors causing residential property overhang in Malaysia and negative impacts of residential property overhang towards Malaysia’s property market as well as recommend strategies of possible solutions to minimise the residential property overhang problem based on previous researches. The next step is to distribute the questionnaire survey forms towards the target group of millennials in the age range between 20-39 years old through online based on the 3 of the objectives. The data were then will be analysed using Cronbach’s Alpha analysis, Descriptive analysis and Relative Importance Index.The findings indicate that the most agreed factors causing residential property overhang in Malaysia which are the price, followed by the household income and supply-demand mismatch factor. Besides, the most agreed of the negative impacts of residential property overhang towards Malaysia’s property market is the negative impact for the economic and finance sector. For the objective 3 of recommendation on the possible solutions to minimise the residential property overhang in Malaysia, the most agreed strategies are reduction of property price and reduction of property supply.