THE SUN DAILY. 17TH AUGUST: The local property market is gradually returning to normalcy as indicated by an increase in the number of launches and sales, according to the Real Estate and Housing Developers Association Malaysia (Rehda).
Rehda president Datuk NK Tong said that just over half of the respondents (53%) planned to launch projects in the second half of 2023 (H2’23). However, of these, three-quarters anticipate that their sales performance will remain at or below the 50% mark.
“The increase in the number of launches and sales is a positive sign towards a property market that is slowly returning to normalcy. However, true recovery is still out of reach as developers are still struggling with challenges that have yet to be properly addressed such as material price hike, cross-subsidisation as well as high compliance and utilities costs,“ he said at the Rehda Property Industry Survey for H1’23 and Market Outlook for H2’23 and H1’24 media briefing today.
The majority of the coming launches fall within the price range of RM150,001 to RM300,000, primarily in Kedah/Perlis, Malacca, Pahang, Penang and Perak.
Tong stated that developers are holding a neutral stance for H2‘23 but express higher confidence as they look ahead to the first half of 2024.
He said that the initiatives announced by the government to drive homeownership among the people, particularly those in the B40 and M40 categories, will lift the sentiment even as the operational environment remains challenging.
“The enhancement to the housing credit guarantee scheme, the introduction of the Madani housing scheme and the announcement by Local Government Department Minister Nga Kor Ming on the proposed National Housing Fund are some of the efforts that we believe will yield positive results. We look forward to engagements with the government and related industry players so more details on these initiatives can be shared,“ he added.
The recent survey conducted by Rehda Institute saw the participation of 148 member developers. It revealed an increase in new launches and sales performance compared with H2’22.
In the first half of 2023, 14,392 residential units were launched, recording a 50% increase compared with the previous corresponding period.
About 62% of the launches during the reviewed period were priced at RM700,000 or less.
The majority of these units comprised apartment/condominium (7,183 units) followed distantly by two- and three-storey terrace and serviced residences (3,729 units and 1,223 units respectively).
Residential sales increased too, totalling 11,273 units (H2’22: 5,087 units), out of which 35% were new launches.
The top-performing categories in terms of sales were apartment/condominium with 3,749 units sold, followed by serviced residences at 3,688 units, and two/three-storey terrace homes with 2,040 units.
Some 53% of respondents reported to have unsold completed residential units at the end of the review period mostly aged between zero and 12 months (47%) and beyond 36 months (31%).
The main reasons cited for these units being unsold were end-financing loan rejections, unreleased bumiputera lots, and high prices.
Notably, a majority of these residential units were priced above RM1 million, accounting for 23% of the total, followed by those within the price ranges of RM400,001-RM500,000 and RM700,001-RM800,000 (both at 20.9%).
Nearly three-quarters of the respondents reported an average of 15% increase in their overall cost of doing business in H1’23, as opposed to 13% in the previous half.
Additionally, 84% of the participants reported being affected by the present economic conditions and subsequently implemented cost-reduction measures in their operations, including freezing recruitment, offering fewer benefits and perks, and decreasing salaries.
These measures also extended to their production and delivery strategies, involving rescheduling the launch of planned projects, scaling down launch sizes, and postponing projects due to weak demand.