By Khairie Hisyam
Despite market challenges, developers are still feeling optimistic on prospects in the second half of 2013 up to the first half of 2014, according to the findings of the Property Industry Survey 1H2013 by the Real Estate and Housing Developers’ Association (REHDA).
With 150 respondents out of 1,030 REHDA members in West Malaysia, the survey found that 59% of respondents reported similar or better sales performance in 1H13 compared to 51% of respondents in the corresponding six-month period in 2012, as sales picked up with 56% take-up in 1H13 compared to 46% in 2H12.
The improved sales figures came on the back of more units being launched in 1H13 at 10,985 units compared to 10,448 in 2H12, although the amount is less year-on-year (y-o-y) than the 11,826 units launched in 1H12.
Going forward, 63% of developers polled by the survey expect to launch 18,181 units collectively in 2H13, a significant 74% jump y-o-y over 10,448 units launched in 2H12. Some 87% of these units will be residential with the rest being commercial.
In comparison, 2H12 saw 9,085 residential units with another 1,363 commercial units launched.
Of respondents with planned launches in the second half of the year, 42% expect to see sales percentages of more than 50% with 11% expecting to see 75% upwards in terms of sales percentage.
Kuala Lumpur is set to see the RM1 million to RM1.5 million range be the most popular price range launched in the second half of this year, higher than the previous most common range in 1H13 which was between RM500,000 and RM1 million.
As for Selangor, the most commonly launched price range is set to be lower in 2H13 at RM1 million to RM1.5 million compared to upwards of RM1.5 million in 1H13.
‘Still optimistic’
Some 45% of respondents remain optimistic on the housing industry in the second half of the year, although this figure dips slightly to 43% when it comes to 1H14.
Another 42% and 45% respectively are undecided on the overall housing industry outlook for the next two six-month periods.
Overall, 50% of respondents feel optimistic about the property market in the second half of 2013 with 45% feeling the same towards 1H14. Another 33% and 39% respectively are neutral on the property market’s outlook over these two six-month periods.
Michael Yam
However, REHDA president Michael Yam said that Malaysian buyers may become more cautious as they assess the impact of recent local and global developments in addition to the upcoming Budget 2014 announcement.
“Going forward, we foresee greater headwinds for the property market, as since the survey was completed at end of June 2013, several global events and economic changes have taken place that could lead to negative sentiments, impacting confidence,” said Yam.
Local demand still driving the market
The survey found that local demand is still driving the property market with 95% of buyers as reported by the respondents being local, of which 62% buying for own stay with another 28% buying for investment purposes.
Another 7% are buying for their family members.
“69% (is) really (buying) for (their) own use,” said REHDA National Treasurer NK Tong when presenting the survey findings today, pointing out that 69% would cover purchasers who are either buying for own occupation or for their children.
From these figures, 41% of respondents saw more than 51% of their units being sold to first-time home owners with 19% of the respondents reported seeing more than 75% of their buyers falling into this category.
As for the remaining 5% of reported buyers comprising foreigners, some 45% are buying for investment purchases while 16% are for own stay and another 14% are buying properties as their holiday homes.
Business costs continue to rise
However, developers continue to face challenges such as labour issues including workforce shortage and inconsistent labour supply as well as building material issues which include continuously rising costs of building materials.
Overall, this has led to rising business costs for the respondents, with some 49% reporting that their costs of doing business has risen by about 5–10%.
“I think this continues to be the trend every time we meet — that the cost of doing business continues to go up,” said Tong of REHDA, adding that additional costs imposed by local authorities and utilities companies also play a part.
“With the clampdown on foreign workers lately, I think this will continue to put pressure on labour prices as well,” added Tong, saying that he expects labour to remain an issue in the second half of the year.
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