No business activity, no sales at new housing projects

A lack of commercial development in areas with new housing projects appears to be one of several factors contributing to a shortage of demand among buyers, leaving units in such sites at risk of remaining unsold.

This is a concern not only among developers but for real estate agents as well.

Speaking to MalaysiaNow, they said buyers want houses in areas that are lively – not necessarily booming, but with good economic and business activity.

Examples include facilities such as banks, car service centres, restaurants, entertainment centres, pharmacies, childcare centres and 24-hour launderettes.

Checks by MalaysiaNow at several large cities in the centre and south of the peninsula have found this to be largely true.

A drive from Johor Bahru to the Klang Valley reveals a number of housing areas along the highway that appear comfortable and even luxurious but are dotted with “For Sale” signs.

Such housing developments can be found in Seremban, Nilai, Sepang, Salak Tinggi and Cyberjaya, to name just a few locations.

Real estate agent Saiful Nizam said sales for completed units have been very slow.

“Part of the reason is the location of these houses,” he told MalaysiaNow.

“Another problem is the selling price which is just too expensive.”

Raymond Cheo, an agent based in Johor Bahru, however said that price was not too big of an issue for buyers.

Cheo, who has been in the business for 24 years now, said serious buyers would negotiate with their banks for a loan in order to seal the deal.

He said his observation has been that buyers pay more attention to the area in which the houses are built, and whether they have strong economic activity.

This has been the trend for the past five years or so, he said. Before that, buyers were not too picky about the commercial factor in prospective developments.

“They looked for homes that corresponded with their income,” he said. “Even if the houses were in quiet areas, they would buy them because they were cheap. They would pay through monthly instalments or rent them out to other people.”

Now, though, even first-time home buyers want locations that “have it all”, he added.

“There must be a Starbucks around the corner, a KFC nearby, a mamak close at hand and a supermarket.

“If we advertise houses in areas with a lot of commercial activity, at malls for example, these units are usually snapped up in no time.”

These days, some developers are building residential units that come in a package with new commercial units.

MalaysiaNow understands that these units are put up for sale or rent to provide services and facilities to home buyers.

However, the traction of such projects on the market appears lacklustre for now as the commercial units are not high in demand.

Few businesses are opening shop, and even some commercial centres in these towns are languishing without tenants.

At a few developments in Cyberjaya and Nilai, a quick tour of the area found only a handful of cars in the parking lots.

Even the housing units near to commercial buildings were empty and quiet.

Cheo spoke of two of his clients, a husband and wife who both worked as teachers.

“They were willing to buy a house nearly 45km away from the school,” he said. “The house I showed them was only 7km away.”

According to government statistics, 30,290 housing units worth a total of RM19.75 billion remained unsold as of the end of last year.