Rehda president Datuk Seri FD Iskandar during the association's Property Industry Survey for the first half of 2016.

PETALING JAYA: Rehda (Real Estate and Housing Developers' Association) Malaysia continued to undertake its property industry survey to assess the property market performance in 1H 2016 as well as the outlook for 2H 2016.

The results of the survey was released on September 14 during a press conference held at Wisma Rehda, Kelana Jaya. The survey saw participation from Rehda members from all 12 states across Peninsular Malaysia. It revealed that the number of respondents with project launches as well as units launched in 1H 2016 has reduced significantly compared to 2H 2015.

The reduction was particularly evident in Kedah, Perak, Kuala Lumpur, Pahang, Selangor and Melaka.

Residential properties continued to lead new launches, albeit at a much reduced volume, while commercial units experienced a decrease of 30%. The residential market continued to be driven by domestic markets, who were mostly purchasing for their own occupation or upgrading.

Sales performance

The performance of sales experienced a significant decrease from 52% in 2H 2015 to 39% in 1H 2016. Two- and three-storey terrace houses dominated the market share by more than half out of the total sales reported.

Launches

Half of the residential units launched were priced below the RM500,000 mark, with property launches of below RM200,000 on the rise. All of the states were retaining their prices, except Melaka.

While 2H 2015 saw strata launches overtaking landed properties by 1%, landed residential properties have taken back its dominance on property launches in 1H 2016. Launches of landed properties were mainly in Selangor and Johor.

Unsold units

Overall, the situation of unsold units was still manageable despite the decrease in sales performance. However, the number of affected respondents with unsold units of 30% and below has increased – 2H 2015 with 68% and 1H 2016 with 74%.

End financing and loan rejection remained a major problem to nearly 70% of the respondents and it has spread to affect almost all the price ranges.

Respondents also reported that the various cooling measures introduced since 2010 have also affected sales, causing it to slow down noticeably.

Business operations

The survey went on to show that the developers continued to undertake cost cutting measures to counter the rising cost of doing business., which remained at up to 10%.

Amongst some of the measures which were implemented by developers to help boost sales were: creative marketing strategies, aggressive participation in exhibitions, review selling prices, as well as creating financing and easy-payment schemes.

Affordable housing projects

The provision of affordable housing continues to remain a challenge, with respondents reporting non-feasibility due to high land prices as well as the increased overall cost of doing business, being the major challenges.

Future launches and outlook for 2H 2016 and 1H 2017

Slightly less than half of the respondents reported launches for 2H 2016, of which 48% were targeting only below 50% sales in the first six months of launching.

Prices of future launches are expected to maintain except for Melaka, which will see prices reverting back to the RM200,001-RM500,000 price range.

Generally, the survey respondents anticipated the level of optimism to improve in 2H 2016, with further improvements to be seen in 1H 2017.