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REHDA: 2H2016 Recorded Increase In Property Launches, Sales Performance Improved by 6%


REHDA: 2H2016 Recorded Increase In Property Launches, Sales Performance Improved by 6%

SELANGOR, 19 APRIL: Participated by 165 REHDA members from all 12 states across Peninsular Malaysia, the 2H 2016 Property Industry Survey revealed an increase in the number of launches in 2H 2016 where total units launched has increased by almost double compared to the previous half, from 7,172 units to 13,276 units.

Residential properties continued to lead new launches with more than half being strata units comprising apartments, condominium, serviced apartments and low-cost flats.

The strata launches which overtook landed properties by 18% were mainly in Penang, Wilayah Persekutuan Kuala Lumpur and Selangor.


In tandem with the increased launches, sales performance experienced a slight improvement, exceeding the previous half by 6%. Apartments/condominiums, double-storey terrace homes and serviced apartments dominated the market share at 31%, 28% and 17% respectively.


Nearly half of the residential units launched were priced RM500,000 and below with most states retaining their prices except for Melaka, Penang and Kelantan which showed reductions in their pricing.


Although sales performance improved slightly, respondents with unsold units in the price range of RM250,000 to RM500,0000 and RM500,000 to RM1 million showed an increase of 17%. End-financing and loan rejection was reported to be the top reason for unsold units affecting 85% of the respondents, more than half coming from the below RM700,000 price range.


Increased cost of doing business continued to be a challenge to developers with 56% respondents reporting cost has increased up to 10%. Major cost components that are affecting business cash flow are materials and labour cost as well as compliance costs such as policies and contributions fees. Respondents reported that aside from undertaking measures to help boost sales, various cost-cutting measures have also been implemented such as freezing new recruitments, giving less benefit or perks for personnel, rescheduling and reducing the scale of project launches.


Provision of affordable housing was also reported to remain a challenge with respondents reporting non-feasibility due to increased overall cost of doing business as well as the high land price being the major challenges. Nevertheless, the number of respondents providing affordable housing has increased from 31% in 1H 2016 to 40% in 2H 2016.


Slightly more than half of the respondents planned to launch in 1H 2017, however, the sales targeted were not high. Almost three-quarters of the respondents are expecting only below 50% sales in the first 6 months of launch.

Prices of future launches are expected to remain the same in most states except for Negeri Sembilan, Johor, Penang and Kuala Lumpur which are reducing their prices while Kelantan will see prices reverting back to the RM200,001-RM500,000 price range from below RM200,000 in 1H 2016.

Whilst almost half of the respondents were pessimistic on the 1H 2017 outlook, more are anticipating the market to be better in 2H 2017 where the level of pessimism is expected to reduce.

Disclaimer: The information is provided for general information only. Malaysia Sdn Bhd makes no representations or warranties in relation to the information, including but not limited to any representation or warranty as to the fitness for any particular purpose of the information to the fullest extent permitted by law. While every effort has been made to ensure that the information provided in this article is accurate, reliable, and complete as of the time of writing, the information provided in this article should not be relied upon to make any financial, investment, real estate or legal decisions. Additionally, the information should not substitute advice from a trained professional who can take into account your personal facts and circumstances, and we accept no liability if you use the information to form decisions.

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