H2 recovery for Malaysian property

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The Real Estate and Housing Developers’ Association (Rehda) president Soam Heng Choon said the global vaccine rollout will improve the country’s economic outlook, which will in turn spur the local property sector. The Star/ANN

Malaysian developers are more optimistic about the outlook of the property industry in the second half (H2) of 2021 compared with the first half (H1), on the expectation that the broader economy will recover and boost buying sentiment.

In a survey of 134 respondents by the Real Estate and Housing Developers’ Association (Rehda), it was revealed that 20 per cent are optimistic about the property market and sales performance in H2 of 2021, compared with just eight per cent in H1.

The survey also showed that 26 per cent are optimistic about residential sales growth in H2 of 2021, compared with just eight per cent in H1.

Rehda president Soam Heng Choon said the global vaccine rollout will improve the country’s economic outlook, which will in turn spur the local property sector.

Meanwhile, in its property industry survey for H2 of 2020 and market outlook for H1 and H2 of 2021, Rehda said a total of 13,037 units are being planned for launch in H1 of 2021, consisting of 12,874 residential units (6,998 strata units and 5,876 landed units) and 163 commercial units.

Amongst respondents with future launches, the majority of them (83 per cent) anticipate their sales performance to be 50 per cent and below for the first six months.

The survey revealed that Kedah, Perlis, Negeri Sembilan, Pahang and Selangor planned to launch residential units within the 250,001-500,000 ringgit ($60,000-120,000) price range, whereas Johor, Penang and the federal territories aimed to offer units priced between 500,001 and 700,000.

Additionally, Rehda said respondents were neutral about the economic and business outlook, as they were concerned about consumers’ purchasing power in H1.

The same was reported with the property industry outlook, specifically with regards to residential sector growth.

However in both cases, Rehda said there is increased optimism for H2 of 2021.

In terms of performance for 2020, Rehda said H2 of last year saw the launch of 12,640 residential units compared with 12,556 units in H2 of 2019, with two-and-three-storey houses being the most popular (4,120 units) followed by service apartments (3,250 units) and apartments/condominiums (3,059 units).

Price-wise, 80.8 per cent of the units were in the 250,001-700,000 ringgit range, 7.8 per cent were within the 100,000-250,000 range and 6.4 per cent were priced between 700,001 and one million.

Separately, Rehda said sales performance was better in H2 of 2020, increasing from 43 per cent in H2 of 2019 to 45 per cent in the period under review.

Out of the 5,736 residential units sold, 2,467 units were in the two-and-three-storey terrace category, while the second top performing type was service apartments with 1,225 units while 1,082 units of apartments/condominiums were sold in H2 of 2020.

Rehda said first time buyers made up the majority of purchasers in the period under review, while most homes bought were for the purpose of self-dwelling, purchasing for family members and for investment.

Separately, Rehda said overall cost of doing business increased by 12 per cent in H2 of 2020, according to 51 per cent of the respondents.

The survey revealed that 98 per cent of respondents were affected by the current economic scenario, while those that were “highly and severely affected” increased to 42 per cent, compared with 26 per cent in H2 of 2019.

Compliance cost remained the number one cost component affecting cash flow, followed by material and labour cost, as well as land cost.

THE STAR (MALAYSIA)/ASIA NEWS NETWORK