PETALING JAYA – The Real Estate and Housing Developers’ Association (Rehda) Malaysia found that 51% of property developers are not planning to launch new projects in the first half (1H) of 2023, given the unfavourable market conditions.
Its president Datuk N.K. Tong said that based on current sentiment, 94% of developers in its survey attributed that having access to end financing for homebuyers continues to be the main challenge for homebuyers.
“Looking at this environment, we think developers are waiting until the banks take a more positive view on financing terms.
“Besides, depending on the location on their projects, developers feel that the market isn’t quite there yet, or hasn’t reached a sales price that will make sense for them to launch,” he said at a press conference after presenting Rehda’s Property Industry Survey 2H 2022 and Market Outlook for 2023 here today.
Tong added that with the rising inflation, developers were having difficulty anticipating cost increases, and how they would be able to keep within the affordability price range for homebuyers.
“About 68% of respondents expect building material costs will continue to trend higher for another 12 months at least until they stabilise.
“To counter the price increase in building materials, developers have no choice but to increase property selling prices (double digits on average) or lower their profit margin,” said Tong.
They could otherwise opt to use more cost-effective materials, build smaller units, or change designs to suit the cost increase, he said.
“We have asked the government to review any levies or taxes on imported materials, but the reality is everything that we consume requires energy, especially for construction materials.
“We hope the government can help to ensure that everything (along the supply chain) runs smoothly, such as construction material costs and the labour shortage, and remove any impediments that may cause the price to go up, and encourage competition,” said Tong.
Tong said 61% of respondents had planned to launch their projects in 1H 2023, but the majority (83%) viewed that their sales performance would record 50% and below.
Most states, he said, aim to launch more residential units priced between RM250,001 and RM500,000, except Johor (RM700,001-RM1 million).
Most respondents were more optimistic of the outlook for 2H 2023, he noted .
This was supported by the optimism in the domestic economic environment sentiment of 70% in 2H 2023 against 51% in 1H 2023, and higher consumer purchasing power of 60% in 2H 2023 from 44% in 1H 2023 in the survey.
To boost sales for 1H 2023, he said, the survey outlined three top measures that include aggressive participation in digital marketing and virtual technology, aid with first 10% in downpayment, and special rebates for second properties purchased from the same developer, or referral rebates.
The survey involved 136 Rehda members in Peninsular Malaysia, conducted by its research arm Rehda institute and assisted by Sunway Institute for Global Strategy and Competitiveness, Sunway University. – Bernama, February 22, 2023
