Rehda members during the media briefing of REHDA Property Industry Survey 1H 2017
PETALING JAYA: The number of launches for both residential and commercial has reduced significantly by 31% and 34% respectively, in comparison to the previous half.
Albeit the reduction, a similar percentage (4%) for commercial units launched were recorded for 1H 2017 and 2H 2016.
Strata properties continued to dominate the residential market, with most launches mainly focused in Selangor covering areas which include Klang, Shah Alam, Hulu Langat, Seri Kembangan and Puchong.
Real Estate Housing Developers Association (REHDA) had held a media briefing of the REHDA Property Industry Survey 1H 2017, in Wisma REHDA, Kelana Jaya.
The findings revealed that the challenging market for the property sector remained throughout the first half of 2017.
The survey reported residential properties continued to lead new launches with 53% of them represented by strata units, despite volume drop in overall performance by 9% from the preceding half (1H 2017:32%; 2H 2016:43%)
Although launches experienced a reduction, sales performance, on the other hand, showed a slight growth of 45% to 48%, with increased demand in landed property particularly the two to three - storey terraced and single - storey, as well as serviced apartment and low-cost houses or flats.
A similar trend was observed for buyer’s profile, where the majority of the purchasers are first-time house buyers mainly purchasing for self-use.
Overall, about three-quarters of the respondents had reported, having unsold units with the majority of them stating end-financing and loan rejection, as well as weak demand and unreleased Bumiputera quota as the main reasons for the unsold units.
41% of the unsold units represented properties below RM500,000, situated mainly in Johor, Kedah, Melaka, Pahang, Perak and Perlis.
“It is difficult for property developers to lower property prices because material and labour cost like cement, brick and metal keep increasing especially after the introduction of Goods and Services Tax (GST).
Giving developers an incentive, for example, lowering the tax and not charging development fee, would encourage more developers to build affordable houses,” said Rehda president Datuk Seri FD Iskandar.
Rehda Malaysia President, Datuk Seri FD Iskandar during his presentation to the media.
End-financing remained the major issue for the unsold units, with 73% of the respondents reportedly facing this problem. About half of the loan rejection stemmed from properties priced RM500,000 and below.
Contributing factors to the financing issues included ineligibility of buyers’ income, credit history/CTOS/CRISS, the lower margin of funding, bank requesting more documents and limited quota for low cost and affordable housing.
Findings of the survey revealed that 40% of the respondent’s organisation was profoundly affected by the current economic scenario.
The top three cost components reported to affect cash flow include land, material and labour cost, as well as compliance funding.
51% of the respondents also reported that the cost of carrying out businesses has increased up to 10%.
Aside from adopting cost-cutting measures in operation and production, affected respondents also reported that they had taken initiatives to help boost sales such as assisting buyers with the initial 10% down payment, reviewing selling prices, as well as enhancing innovation and creativity of their products.
A handful of launches in 2H 2017 were expected to increase, with average sales performance foresaw within the first six months of a property launch.
Most states would either retain or lower housing prices at RM500,000 and below, with the exception for Selangor and Kuala Lumpur.
