The vacant office buildings and the rows of unoccupied shoplots in Pahang underscore that many business owners there are unwilling to pay high rent amid lacklustre market conditions, reported the New Straits Times.
According to the Real Estate and Housing Developers Association (REHDA), many landlords are unable to lease their properties to budget-conscious tenants, with the monthly rental for ground floor units amounting to RM3,000, and RM5,000 for three-storey commercial blocks.
Chua Say Chai, Chairman of REHDA’s Pahang branch, said the weak rental property market in the state is a reflection of Malaysia’s sluggish economy.
“The situation started after the implementation of the Goods and Services Tax (GST) in April 2015,” which resulted in a significant increase in the prices of construction materials, and the cost was further pushed up by the softer ringgit. As a result, developers in the state adopted a more cautious stance in rolling out commercial developments.
To avoid an oversupply of commercial units, the state government advise developers to take into account the current market conditions before actually building their properties.
“Developers must be more careful and carry out detailed market studies before undertaking projects to prevent [property] glut and inability to sell,” urged Datuk Wan Rosdy Wan Ismail, Chairman of state Housing and Urbanisation Committee.
Nonetheless, “the property glut issue is not too bad here compared to Selangor such as in Bukit Rimau and Kota Kemuning, both in Shah Alam, where numerous properties are for sale or rent,” noted Chua.
The local real estate market is also expected to get better by end-2017, as many visitors and tourist are expected to arrive following the recent unveiling of this year’s Visit Pahang by the state authorities.
Another factor that would positively affect the property sector is the construction of the East Coast Rail Link (ECRL) that would link areas in Pahang with Klang Valley.
“People would be able to travel more easily to Kuantan, which in the long run would further develop the east coast,” Chua noted, adding that the major transport project is anticipated to revitalise the state’s real estate market.
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