REHDA Property Forum 2016

Date: 9 March 2016
Company Name: REHDA Malaysia
REHDA Malaysia revealed the findings of its REHDA Property Industry Survey second half (2H) 2015 at the REHDA Media Briefing on 9 March 2016. The survey respondents comprised REHDA members from all 12 states across Peninsular Malaysia. The survey gauged the property market performance for the second half of 2015 and the outlook for 2016, as well as identified the challenges faced by members in this current softening market. Overall, the percentage of respondents with project launches and units launched in 2H 2015 showed a reduction compared to the previous half. Residential properties continued to lead new launches albeit at reduced numbers while commercial units recorded a slight increase. Domestic buyers continued to lead the residential market with 13 percent of respondents reporting that their buyers were purchasing for their own occupation, while those with clients purchasing for investment purposes had decreased from 23 percent in first half (1H) 2015 to 13 percent in 2H 2015.

Sales Performance
Sales performance was unexpectedly holding well, with increased number of respondents reporting better sales, mainly for the apartment/ condominium units.

Launches
Launches of landed residential and strata properties moderated in 2015, with strata launches overtaking landed properties by only 1 percent. Launches of strata properties were mainly in Selangor and Kuala Lumpur. Commercial unit launches on the other hand saw a small increase of 52 units.

Unsold Units
In tandem with the unexpectedly better sales performance, respondents with unsold units decreased from 78 percent in 1H 2015 to 62 percent in 2H 2015. End financing and loan rejection topped the reasons for unsold units with increased number of respondents facing such problems. Houses priced between RM250,001 to RM700,000 appeared to be most vulnerable to loan rejection by banks.

Business Operations
Increased cost of doing business continues to be a burden to developers, with 61 percent of respondents reporting cost had increased up to 10 percent. Some developers had even resorted to implementing cost-cutting measures for operation and production/delivery.

Affordable Housing Projects
Although respondents providing affordable housing had shown a slight increase, provision of affordable housing remains a challenge with increased overall cost of doing business being the main reason, followed by high land prices and cross subsidies from high-end products.

Developers Interest Bearing Scheme (DIBS)
Sixty-five percent of the respondents opined that the Developers Interest Bearing Scheme (DIBS) will help to improve their sales performance, out of which 62 percent agreed that DIBS should be reinstated for properties below RM500,000 for first-time buyers to facilitate the nation’s home ownership agenda.

Future Launches and Outlook 1H and 2H 2016
Although almost an equal number of respondents with and without launches were recorded for 1H 2016, more than three-quarters of them were targeting only below 50-percent sales in the first six months of launch. Prices of future launches are expected to maintain. In conclusion, almost 70 percent of the survey respondents were pessimistic on the 1H 2016 outlook. However, the level of pessimism is anticipated to reduce in the following six months with more respondents being neutral.