Rehda expects property sales to improve in 2H of the year

The association’s 124 members across Peninsular Malaysia anticipate a pick-up in sales on higher confidence among buyers 

by AUFA MARDHIAH / Pic credit:

THE Real Estate & Housing Developer’s Association (Rehda) expects sales of properties to cool in the first half of 2022 (1H22) after experiencing some improvement in sales in the 2H21. 

Rehda’s 2021 survey noted the association’s 124 members across Peninsular Malaysia expect to see a pick-up in sales in the 2H22 on higher confidence among buyers. 

A total of 10,665 units were launched in the 2H21 which was 8% lower than the 1H21 launch of 11,601 units. 

Majority of the launches were residential units totalling at 10,631 units, priced between RM250,001 and RM700,000. 

In terms of house types, two-and three-storey terrace units proved to be the most popular at 3,165 units launched located mostly in Seremban, Negri Sembilan, followed by apartment/condominium and serviced apartment at 2,909 units and 2,363 units respectively. 

Sales number-wise, the survey noted in the 2H21 5,303 units were sold as compared to 4,540 units of properties in the 1H21 with only 22 of them comprising commercial units as compared to 121 commercial units in 1H21. 

The top performers type-wise were namely two-and three-storey terrace (2,213 units) which are mostly located in Seremban, apartment/condominium (961 units) and serviced apartment (804 units). 

First-time buyers were the highest number of purchasers albeit some drops in percentage. The survey concluded that most were buying for self-dwelling. 

On the other hand, 67 respondents (54%) with unsold units reported to have 30% and below of unsold residential units, mostly affecting units priced between RM250,001-RM500,000 and RM500,001RM700,000 (39% and 18% respectively). 

64% of the survey respondents with unsold units said their unsold completed units are more than two years of age, identifying loan rejection, low demand/interest and unreleased Bumiputera units as the top three reasons for unsold units. 

Meanwhile, 79% of respondents noted that within the period under review, overall costs of doing business have increased up to 18%, which is the highest over the past five years while 96% of respondents reported to be affected by the current economic scenario. 

The top three components affecting cashflow were material and labour costs, compliance cost as well as financing and land costs which shared the number three spot. 

Furthermore, 51% of respondents planned to launch projects in 1H22, totalling 24,557 units (17,969 strata residential units; 5,997 landed residential units and 591 units commercial units). 77% of those with planned launches were anticipating their sales performance to be 50% and below for the 1H22. 

Most aimed to launch residential units within the RM250,001-RM500,000 price range in most states while Johor, Selangor and Penang will have mostly units priced between RM500,001-RM700,000 in their 2022 offerings. 

The outlook for 2022 is largely neutral, but respondents are more optimistic for 2H22. 

On future launches, Rehda acting president Datuk NK Tong said construction cost increase, inflation and buyer sentiment will impact future launches. 

He added the majority of the purchases were done by locals. 

“Developers really need to do a lot of study because it is a buyers’ market. The demand is there but in terms of pricing it needs to suit buyers’ demand. As a developer we will chip in but the steps towards enhancing affordable homes should be done by the governments,” Rehda deputy chairman Datuk Zaini Yusoff said. 

Feedback from developers suggest landed property is still sought after with the slightly expensive landed property with better location priced around RM600,000 to RM700,000, while the landed property in a less strategic area going for around RM400,000 to RM500,000. 

The Rehda survey found affordable property is also sought after especially by first time home buyers targeting high rises in the urban areas and priced between RM400,000 to RM500,000. 

The buyer segment also showed a fall in “investors” compared to previously. 

For industrial properties, Rehda noticed a keen interest in acquiring industrial properties especially with land ranging from 1.21ha to 2.02ha which has a reasonably good pickup. Commercial properties are currently taking a backseat at the moment, it added. 

The Rehda survey did not capture the full statistics of over 1,500 Rehda members but serves as a useful guide and a good reflection of the sentiment in the property industry. 

“While the results do reflect the challenges faced by the industry, I am encouraged by the improving sentiment and outlook in the second half of 2022, as developers put behind the pandemic of the past two years to focus on our nation building efforts of housing the Rakyat,” Tong added.