Soam Heng Choon

Malaysian Property Developers Are Not Optimistic

KELANA JAYA — Property developers in Malaysia are not optimistic about the sector’s outlook in 2H 2019 at least until the end of the year.

Real Estate and Housing Developers’ Association (REHDA) is neutral on the market in the second half of 2019 but feels that things will get better from the first-half of 2020.

The optimism is partially hinged on expectation of the introduction of some incentives for the property sector from the 2020 Budget, which will be tabled on October 11.

Rehda president Datuk Ir. Soam Heng Choon said the association was hopeful that the government would introduce an expansionary budget for 2020 in spur local spendings and economic activities.

“Given the current global economic scenario, it is difficult for the government but we are hopeful,” Soam said at a media briefing on Rehda’s industry survey for the first half of 2019 here today.

For the first six months of 2019, unsold properties rose 16.24% to 5,875 units from 5,054 units recorded in the second-half of 2018, according to the Rehda survey.

The survey revealed that the semi-detached bungalow, terrace house and high-rise buildings were affected by the property overhang.

Among the main factors contributing to unsold units were end-financing issues and unreleased Bumiputera units as well as low demand or buying interest.

The survey also showed a reduction in the number of property launches with a total of 10,574 units compared with 11,964 units in the second half of 2018.

A total of 144 respondents participated in the survey, consisted of property developers from all over the Peninsular Malaysia. The survey revealed that two- and three-storey terrace segment led the launches at 4,048 units, followed by serviced apartments (3,358 units), and apartment/condominium (989 units).

Chart: Malaysia Property Launches 2H 2019

The average selling price of the property launches was between RM250,001 and RM700,000.

Soam said Rehda would continue to embark on aggressive participation in online/social media marketing and property portals, assist first-time homebuyers with a 10% down payment, while promoting units within affordable space.

Future properties are expected to be launched in the second half of 2019 and first half of 2020 would include 18,373 strata and landed residential units, with an additional 921 units from mixed development projects and 153 commercial units.

The survey also revealed that most states except for Kelantan, Kuala Lumpur, Johor and Selangor, had planned to launch residential units within the RM250,001 – RM500,000 price range.

However, Selangor is the only state to have mostly units priced between RM700,001 and RM1 million in the pipeline.