THE majority of property developers said they were affected by the current economic scenario in the first half of 2019 (1H19), with fewer launches held while the number of unsold units remained high.

The Real Estate and Housing Developers’ Association (Rehda) Property Industry Survey for 1H19 showed that 93% of developers are affected by the current economy, up from 87% in 2H18.

“Thirty-five per cent of respondents overall also said the cost of doing business increased by 9%,” Rehda said on its survey’s findings released today.

The major components that affected developers’ cash flow are compliance cost, material and labour cost, and land cost.

Rehda said 114 developers from around Peninsular Malaysia had participated in its survey.

More developers – 73% – reported unsold units, compared to 62% who experienced the problem in 2H18. Those with unsold units said the units amounted to less than 30% of stock.

The total number of unsold units for 1H19 was 5,875, higher than the 5,054 recorded in 2H18.

Units in the semi-dee/bungalow category formed 34% of the unsold lots, terrace houses 28%, and apartments and condominiums, including services apartments, formed 24%. 

The main reason cited for unsold lots for 88% of respondents were buyers’ end-financing issues, followed by unreleased Bumiputera units and low demand/interest.

Fewer units launched

Only 10,574 units were launched in 1H19, the bulk of which were residential, compared to the 11,964 units launched in 2H18, the majority of which were also residential units.

Most of the units launched this year – at 72% – were in the price range of RM250,001 to RM700,000.

Despite fewer units launched, sales went up to 58% – a spike of 15% in sales performance from 43% in 2H18.

Most of the properties sold (6,062 units) were homes. Areas that did particularly well were terrace houses in Bandar Sri Sendayan in Negri Sembilan and Durian Tunggal, Malacca, followed by serviced apartments in Wangsa Maju and Petaling Jaya.

Rehda said most buyers were first-time house purchasers who were buying to live in.

On affordable housing, the survey collected suggestions for the government to boost the building of these properties by reducing development charges, lowering the land conversion premium and granting exemptions for capital contribution charges.

Overall, developers’ sentiment towards the economic and business outlook for the property industry is neutral for the remainder of 2019 and more optimistic for the first half of next year.

Fifty-two per cent of respondents said they were planning launches in 2H19, which would involve 18,373 units, both strata and landed.

Another 921 units to be launched will be from mixed development projects, besides 153 commercial units.

The price range for upcoming launches are between RM250,001 and RM500,000, in most states except for Kuala Lumpur, Kelantan, Johor and Selangor.

Selangor is the only state to have units priced between RM700,001 and RM1 million in the pipeline, Rehda said. – September 26, 2019.