KUALA LUMPUR – The Real Estate and Housing Developers’ Association Malaysia (REHDA) revealed figures from a survey that 77% of developers only foresees sales of future property launches in 1H2022 to be below 50%.
REHDA acting president Datuk NK Tong revealed that the second half of 2021 saw 10,665 units launched but only 5,303 of them were sold out.
“While the results do reflect the challenges faced by the industry, the numbers were slightly better than the first half of 2021. 1H2021 had only 4,560 units sold out of the 11,601 units launched,” he said at the REHDA Property Industry Survey 2H2021 and Market Outlook 2022 media briefing.
For 2H2021, only 40 out of 124 REHDA members had project launches.
“During then, even though the amount of launch projects decreased by 3.0%, sales performance increase 11% compared to the preceding quarter,” said Tong.
He added that residential properties formed bulk of the launches with only 0.3% commercial properties.
Loan rejections main reason for unsold units
Uncertain market conditions, with COVID-19 and movement control orders were the main reasons survey respondents didn’t want to have property launches.
“Loan rejections, low demand/interest, and unreleased Bumiputera units were main reasons why units are unsold. 31% if loan rejections were for units priced between RM500,000 to RM700,00 whereas 27% of the rejections were for units between RM250,001 and RM500,000,” said Tong
Despite that, he believes that investors will seek out property assets to act as a hedge from inflation although there is “no tailwind for developers” with the end of the Home Ownership Campaign.
He also highlighted the impact of the increase in building materials costs that in turn results in higher construction costs.
“Potential rate hike can signal two things; one, inflation and two, a recovery in the economy. Both are actually positive for the property sector, but we still need to see how the situation can evolve,” he said.
He added that the situation remains challenging and property developers would be working closely with the Ministry of Housing and Local Government to find strategies in ensuring housing issues be resolved.
Join our Telegram group for the latest updates!