PETALING JAYA, Feb 22 — The Real Estate and Housing Developers’ Association (Rehda) Malaysia found that 51 per cent 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 per cent 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 of their projects, developers feel that the market is not quite there yet, or has not reached the 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 said with the rising inflation situation, developers were having difficulty anticipating cost increases to be incurred, and how they would be able to keep within the affordability price range for home buyers.
“About 68 per cent 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 digit on average) or lower their profit margin,” he said.
They could otherwise opt to use more cost-effective materials, or building smaller units or change the design to suit the cost increase.
“We have asked the government to review any levies or import 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) is running smoothly, such as construction material costs, the shortage of labour and remove any impediments that may cause the price to go up and encourage competition,” said Tong.
About 61 per cent of respondents had planned to launch their projects in the first quarter of 2023, but the majority (83 per cent) viewed that their sales performance would record 50 per cent 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 about the outlook for the second quarter of 2023.
This was supported by the optimism in the domestic economic environment sentiment of 70 per cent in the second quarter of 2023 against 51 per cent in the first quarter of 2023, and higher consumer purchasing power of 60 per cent in the second quarter of 2023 from 44 per cent in the first quarter of 2023 in the survey.
To boost sales for the 1H 2023, Tong said, the survey outlined three top measures that include aggressive participation in digital marketing and virtual technology; assisting with the first 10 per cent in downpayment; and offering special rebates namely for second property purchased from the same developer (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 (IGSC), Sunway University.
— Bernama
