KUALA LUMPUR (March 20): Malaysian property developers are optimistic that demand will pick up in the second half of the year, while staying cautious about rising costs of doing business ahead, according to an industry survey.
Optimism was at its highest in five years, according to results of a survey by the Real Estate and Housing Developers’ Association (Rehda). More than half of the respondents surveyed expressed confidence in property market trends and sales performance, the association noted.
While sales and the number of units launched fell in the second half from the first six months of last year, “we expect an increase in launches in the next survey as developers regain momentum”, Rehda president Datuk Ho Hon Sang said at a briefing to announce the survey results on Thursday.
In July to December 2024, the total number of launched units dropped by 7% to 13,611 units, while sales also declined 45% to 3,802 units when compared to January to June 2024. “We believe that this was due to member developers completing their launches in early 2024,” Ho noted.
The latest edition of the Property Industry Sentiment Survey drew responses from 127 members of Rehda in Peninsular Malaysia.
Worries aplenty
There are still “a lot of worries” in the industry, said Ho, citing uncertainties from higher cost of utilities, the petrol subsidy review, unexpected taxes and cost impact due to conditions imposed by various agencies.
Most developers reported a 3% to 6% increase in expenses, the survey found. Additionally, 56% of developers flagged construction challenges, including rising material costs, supply shortages, and labour constraints.
“While the government is working to address supply and labour shortages, these challenges are becoming increasingly costly for both the industry and the wider economy,” Ho remarked.
Amid the economic uncertainties, more than one-third of developers reported taking cost-cutting measures, including freezing recruitment, reducing project scales, and delaying launches.
Unsold properties
Further, the survey found that 41% of respondents had unsold completed residential units at the end of 2024. Most of the overhang units were priced between RM400,001 and RM500,000, and more than half of them were serviced residences.
The leading causes of unsold inventory were end-financing loan rejections and low buyer demand, with financing issues often linked to buyers’ income ineligibility, poor credit history, and incomplete financial documentation, Rehda said.
The survey also found that loan rejection rates were highest for homes priced between RM300,001 and RM700,000.
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Source: EdgeProp.my
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