Rehda says affordable homes comprised 65pc of first half launches

Datuk Soam Heng Choon speaks during the Rehda Property Industry Survey session in Kelana Jaya October 10, 2018. ― Picture by Azneal Ishak
Datuk Soam Heng Choon speaks during the Rehda Property Industry Survey session in Kelana Jaya October 10, 2018. ― Picture by Azneal Ishak

KUALA LUMPUR, Oct 10 — Residential units priced under RM500,000 made up 65 per cent of properties launched in the first six months of 2018, according to the Real Estate and Housing Developers Association (Rehda) Malaysia Industry Survey.

The proportion was 52 per cent in the latter half of 2017.

However, the survey that polled 152 Rehda members across the peninsula found that overall units launched fell 12 per cent from the previous half to 13,233 units.

“Apartment/condominium overtook two-three storey terrace houses as the most launched residential property type. Properties priced at RM500,000 and below remained the most launched for three consecutive periods in 1H17 (44 per cent), 2H17 (52 per cent) and 1H18 (65 per cent).

“The most launched selling price by most states were in the range of RM100,001 to RM500,000 with the exception of Kuala Lumpur and Selangor (RM500,001 to RM700,000),” said Rehda’s president Datuk Soam Heng Choon adding that he hopes the worst for property developers may be over.

The property industry’s sales performance also rose to 51 per cent during this half, up from 45 per cent in the same period last year.

Most units sold were two to three-storey terrace houses (2,858 units) primarily in Sepang and Shah Alam followed by 2,047 units of apartments and condominiums located mostly in Cheras and Segambut. In total, the industry sold 6,764 units in the first half.

“First-time house buyers continue to make up the majority of the purchasers — 42 per cent of the buyers bought for self-dwelling while 35 per cent purchased for family members,” said Soam.

The number of respondents with unsold units also increased to 75 per cent in the first half from 66 per cent in last year’s second half with the majority holding 30 per cent unsold stock.

Soam said most of the unsold units were equally distributed within the price ranges of RM250,001 to RM500,000 (mostly in Kuantan and Alor Setar), RM500,001 to RM 700,000 (mostly in Johor Bahru and Shah  Alam) and RM700,001 to RM1 million (mostly in Johor Bahru and Puchong).

“End-financing and unreleased Bumiputera units remained the two major issues for unsold units. Respondents facing end-financing problems increased to 89 per cent in the first half and 39 per cent of the loan rejections were for properties priced RM500,000 and below.

“Most of the respondents have unsold stocks because of the Bumiputera quota. In some states, there is no automatic release mechanism for the Bumiputera quota. We are appealing to all state governments, especially with Pakatan Harapan to look at this seriously,” said Soam.

Another issue facing the industry is that compliance cost takes up quite a chunk of their development costs, affecting their cash flow.

“Compliance cost in total can be up to 20 per cent, which is very high. So if there is a reduction of five per cent of the 20 per cent, it can be very significant. All stakeholders must play a role in reducing price... if the government takes the lead, it can reduce compliance cost,” Soam said.

Moving forward for 2H18, 47 per cent of Rehda’s respondents said they plan to launch a total of 15,852 units out of which 8,991 will be strata units, 6,433 will be landed units and 428 commercial units.

A majority of the respondents’ outlook for 2019 is neutral but at the same time, many are optimistic about the property market’s performance next year.

Rehda’s survey found that 1 per cent was very optimistic, 38 per cent are optimistic for the market’s performance in the first half of 2019, 44 per cent are neutral, 16 per cent pessimistic and 1 per cent are very pessimistic.

This is a fair jump from 2H18 where only 18 per cent are optimistic, 55 per cent neutral, 25 per cent pessimistic and 2 per cent very pessimistic.

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