REHDA Malaysia recently revealed the findings of its REHDA Property Industry Survey for the second half of 2015. The survey respondents comprised REHDA members from all 12 states across Peninsular Malaysia. The survey was to gauge the property market performance for the second half of 2015 and the outlook for 2016, as well as to find out the challenges faced by members in this current softening market.
Overall, the percentage of respondents with project launches and units launched in H2 2015 showed a reduction compared to the previous half. Residential properties continued to lead new launches albeit at reduced numbers while commercial units recorded a slight increase.
Domestic buyers continued to lead the residential market with 13% of respondents’ reporting their buyers purchasing for own occupation while those with clients purchasing for investment purpose has decreased from 23 percent in 1H 2015 to 13 percent in 2H 2015.
Sales Performance
Sales performance was unexpectedly holding well, with increased number of respondents reporting better sales, mainly the apartment/condominium units.
Launches
Launches of landed residential and strata properties moderated in 2015 with strata launches overtaking landed properties by only 1 percent. Launches of strata properties are mainly in Selangor and Kuala Lumpur. Commercial unit launches, on the other hand, saw a small increase of 52 units.
Unsold Units
In tandem with the unexpectedly better sales performance, respondents with unsold units decreased from 78 percent in 1H 2015 to 62 percent in 2H 2015. End financing and loan rejection topped the reasons for unsold units with increased number of respondents facing such problem. Houses priced between RM 250,001 and RM 700,000 appeared to be most vulnerable to loan rejection by banks.
Business Operations
Increased cost of doing business continues to be a burden to developers with 61 percent of respondents reporting cost has increased up to 10 percent. Some developers have even resorted to implementing cost-cutting measures such as ceasing new recruitment, adopting fewer working hours and even salary reductions.
Although respondents providing affordable housing has shown a slight increase, provision of affordable housing remains a challenge with increased overall cost of doing business being the main reason, followed by high land price and cross subsidies from higher end products.
Developers Interest Bearing Scheme (DIBS)
Some 65 percent of respondents said that the Developers Interest Bearing Scheme (DIBS) will help improve sales performance, out of which 62 percent agreed that DIBS should be reinstated for properties below RM 500,000 for first-time buyers to facilitate the nation’s home ownership agenda.
Future Launches and Outlook for 2016
Although almost equal number of respondents with and without launches were recorded for 1H 2016, more than three quarter were targeting only below 50 percent sales in the first six months of launch. Prices of future launches are expected to be maintained.
In conclusion almost 70 percent of the survey respondents were pessimistic on the H1 2016 outlook however, levels of pessimism are anticipated to reduce in the following six months with more respondents reporting a neutral stance.
