Malaysia’s real estate players neutral on sector’s 12-month outlook: Rehda

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NEW STRAITS TIMES. 12th OCTOBER: Real estate developers have a neutral stance towards the property sector’s outlook and domestic economic environment in the next 12 months, particularly in the first half of 2023.

The Real Estate and Housing Developers’ Association Malaysia (Rehda) said this was based on the 150 respondents to the Property Industry Survey 1H2022 and Market Outlook 2H2022/1H2022 released today (Oct 12).

“In the second half of 2022 (2H 20222), only 20 per cent and 24 per cent of respondents, respectively, felt enthusiastic about the domestic economic environment and business prospects for the industry.

“The outlook is less promising than it was earlier. Respondents are not optimistic regarding the consumer’s purchasing power and sales performance for the upcoming year,” said Rehda president Datuk NK Tong.

Fifty-two per cent of respondents are looking forward to launching housing and commercial projects in 2H 2022, comprising 7,459 landed residential units, 7,224 strata residential units, and 275 commercial units.

According to Tong, 66 per cent of the respondents believed their sales performance would be 50 per cent or less over the first six months following their launch.
Helping prospective homebuyers with the initial 10 per cent down payment, stepping up efforts in digital marketing and virtual technologies, and enhancing the product’s innovation and creativity are the three main ways to improve sales.

Future launches will be in the price range of between RM250,001 and RM500,000, except for Penang and Johor.

Johor will have property releases from RM700,001 to RM1 million (in Iskandar Puteri), while Penang (in Butterworth) will launch properties within the price range of RM500,001 to RM700,000.

Melaka plans to launch the majority of its units between RM100,001 and RM250,000.

According to the survey, Kelantan has no launches scheduled.

The remaining respondents (48 per cent) do not have any plans to launch in the 2H 2022 due to unfavourable market conditions, business limitations, a lack of acceptable products or land, and a lack of customer demand in the project area.

The respondents also do not wish to launch because they have more unsold stock, are still subject to Covid-19 and different Movement Control Orders, are still awaiting approval from the relevant authorities, or are still in the planning stages of their project(s).

Tong asserted that developers were pragmatic about how to respond to the market’s present situation.