Iskandar: While challenging market conditions have affected new launches, the reduction can also be primarily attributed to financing issues such as high loan rejections and lower-than-expected margin of financing from the banks.

PETALING JAYA: Malaysia’s property developers were more cautious in launching new residential and commercial units in the first half of 2017 (1H17), with the domestic real estate market recording a significant drop in overall new launches in the period.

In its latest Property Industry Survey 1H17, the Real Estate and Housing Developers’ Association (Rehda) noted that the challenging property market resulted in new launches in the first six months of 2017 to drop by 32% to 9,089 units, compared with 13,276 units in H2’16.

The new launches in 1H17 represented only 42% of the respondents’ initial target of 21,899 units.

However, on a year-on-year basis, new property units had increased by approximately 27%, compared with 7,172 units in 1H16.

“This was primarily on the back of increased demand in landed properties such as two- to three-storey terrace and single-storey terrace houses.

“While challenging market conditions have affected new launches, the reduction can also be primarily attributed to financing issues such as high loan rejections and lower-than-expected margin of financing from the banks,” Iskandar told reporters after the media briefing on Rehda’s survey.

The survey covered 153 Rehda members in Peninsular Malaysia and offers insights into the overall property market dynamics.

Segment-wise, residential and commercial property unit launches in 1H17 fell by nearly 31% and 34% respectively, compared to the previous six-month period.

Nearly 56% of the residential properties launched in 1H17 were priced over RM500,000 and 53% of the overall launches were strata properties.

Moving forward, Iskandar indicated that property developers in most states are anticipated to either retain or lower their prices for upcoming launches. Some 48% of the respondents have also indicated plans to launch properties in the second half of the year amounting to 17,535 units.

“We tend to be slightly more optimistic on the property market and the residential industry moving forward, despite the lower launches in 1H17.

“I think the sector has seen the worst and is likely to improve, barring any significant global consequences.

“A total of 76% of our survey’s respondents with future launches anticipate their sales performance to be below 50% in the second half.

“As end-financing remains the major problem for home buyers, more developers are assisting buyers with regard to down payment and by reviewing prices to boost sales,” he added.