HOMEBUYERS with end-financing problems were among the reasons developers faced a tough market in the first half of this year, a survey by the Real Estate and Housing Developers Association (Rehda) revealed today.

The survey found that 52% of homebuyers could not get end-financing from the banks for low-cost to medium-cost housing in the RM100,000 to RM500,000 price range.

Rehda president Fateh Iskandar said unsold units were the result of end-financing problems.

“At least 73% of the respondents (developers) said the homebuyers were facing end-financing problems.

“It is not that they can’t get loans from the banks, it’s that they can’t get the loan margin they desire.

“The buyers are expecting 90% loans but the banks are only giving out loans between 70% to 75% loans.

“In the end they will have to fork out more money for the downpayment  which they can’t afford,” he said at a press conference at the Rehda office in Petaling Jaya.

Fateh said buyers also had problems with their credit history, lack of documents for the banks, and ineligibility for bank loans.

First-time homebuyers were aged 25 to 30 years old, he said.

“They will need help with the downpayment of 10%. Even the developers have taken the initiative to help boost sales by assisting the buyers with the 10% deposit and reviewing price,” he said.

The survey was conducted with 153 developers who are Rehda members.

Developers surveyed also said that 41% of their unsold units were properties below RM500,000 which were located in Johor, Kedah, Malacca, Pahang, Perak and Perlis.

Besides end-financing problems, low demand and unreleased Bumiputera quotas were other factors for unsold units.

Cost of doing business

The survey also found that 51% of the developers surveyed said their cost of business had increased by up to 10%.

The top three cost components to affect their cash flow were land, material and labour costs.

Overall, 40% of housing developers said they were “highly affected” by the current economic scenario.

Rehda exco member Anthony Cho said the goods and services tax (GST) introduced two years ago had an impact on building costs.

“Steel bars, sand, cement and other items have also contributed to the costs of the buildings.

“The government can introduce GST but it should be reduced from the current 6% if they want to help the construction industry.

“At least after implementing GST they should have reduced the stamp duty,” he said.

The survey also found that fewer property launches were being held for both residential and commercial properties.

The number of launches were reduced by 31% in the second half of 2016, and by 34% in the first half of this year.

Rehda said more launches were expected in the second half of the year with “moderate performance” and that most states would either retain or lower property priced at RM500,000 and below, except for  Selangor and Kuala Lumpur. – September 20, 2017.