KUALA LUMPUR: Developers are largely still confident that the Malaysian property market will improve in the second half of the year, on the back of a more optimistic outlook for the domestic economic environment, according to Rehda Property Industry Survey for H2’23 and Market Outlook for 2024.
Real Estate and Housing Developers’ Association Malaysia (Rehda) president Datuk NK Tong said the optimism is despite the expected higher property prices, as developers are likely to raise prices with building material costs having increased.
“Considering the challenges that the industry faces, the higher optimism for the second half of the year shows that respondents and developers at large are still confident that the market will improve. Looking at the impression of consumer purchasing power, the consumer purchasing power is slowly getting better,” he told reporters at a media briefing yesterday.
Some 56% of the survey respondents said they faced construction challenges in H2’23, with a little over half of them remarking that high prices of building materials were critically impacting their business operations.
Tong said this is an ongoing issue that has been exacerbated by the Covid-19 pandemic, and is not showing signs of going away in the near future.
“Ultimately, increase in building materials (prices) means higher construction costs, which will end up hurting the rakyat. We hope that this issue will be addressed effectively, and that all industry players will play their roles to ensure Malaysians are not further affected by the increase,” Tong said.
The Property Industry Survey recorded that respondents are neutral towards business and property industry outlooks for H1’24.
In H2’23, overall residential launches and performance experienced a downward turn compared to the first half of the year, but sales performance reported a marginal increase.
The findings reported 4,627 out of 12,017 sold units were new launches in H2’23, while the rest were from unsold units launched before the period under review.
Tong said there is strong demand for housing from the rakyat, especially for apartment/condominium units and two- or three-storey terrace homes.
While not all projects launched are captured in this survey, he said, it provides a useful snapshot of the direction of property development in the country today.
“Despite new unit launches experiencing a setback due to the current industry landscape, it is heartening to see that Malaysians still see the value of residential property as a long-term investment, and as a place they and their families can call home,” remarked Tong.
However, the survey results also showed a higher number of unsold completed units in the RM300,001-RM400,000 category at 11% compared with 3% in H1’23.
They find it particularly concerning that homes considered to be within the affordable range experience such a high number unsold when these houses are much needed by the lower income groups.
“As much as this could be a sign of unaffordability among the B40 and lower M40 categories, this is also affecting developers who have taken up the cross-subsidy method to build these houses. Not only that the sales of their open market units are affected due to the higher price, but so are the sales of their affordable units that they had to cross-subsidise for,” Tong noted.
On the proposed Urban Redevelopment Act and remarks made by some quarters to Local Government Minister Nga Kor Ming during a media briefing, Tong commented, “The insinuation that this is to enable developers to seize land for a profit is completely misplaced.”
As responsible developers, he said, Rehda members have plenty of options to acquire land which can be developed easily compared to redevelopment of existing buildings.
However, as a strategic initiative, Rehda applauds KPKT’s vision through the minister to continue to enhance the urban fabric of cities to ensure they remain competitive and attractive globally for the benefit of the rakyat, Tong said.
“We are awaiting more specific details to be able to engage KPKT, but we believe that they have carefully studied similar models in the region that have operated well for many decades,” Tong added.
