News & Events
REHDA Property Industry Survey 2H 2015
and Property Forum 2016
Review of what had been and a look at what is to come.
EXCEPTING A COUPLE of tweaks, there were no major
surprises in the Property Industry Survey unveiled by the Real
Estate and Housing Developers’ Association Malaysia (REHDA)
for the 2nd half of 2015 and for 1st half 2016. First off, the Survey,
a collation of views from participating Association members,
noted, not unexpectedly, a reduction, compared to 1st half 2015,
in the number of respondents with project launches, attributed
to still prevalent ‘headwinds’, i.e., economic slowdown, slide in
crude oil prices, the weakened Ringgit and uncertainties in the
domestic political scene.
Notwithstanding the carry-over gloom, however, sales
performance (residential) was up 12% in 2H 2015 for (a)
apartment and condominium, (b) 2-3 storey terrace and (c)
single storey terrace, in that order. Again compare to the 1st half
of 2015, the 2nd half registered a near 10% increase of first-time
buyers and a like decrease in speculative buying by investors. The
price range of RM200,001 to RM500,000 still leads the market
nationwide excepting Selangor, Penang, Johor and, latterly,
Negeri Sembilan, where most launches were for RM500,001 to
RM1.0 million with Terengganu showing a ‘first-time’ in the
RM250,001 to RM500,000 bracket.
Unsold units, whilst still a gnawing issue, is ‘manageable’
though what is worrisome is that end-financing is now a major
concern with loan rejection at an alarming rate of 68% as a
consequence of credit history, ineligibility of applicants, lower
financing margin and limited quota for affordable housing. Other
reasons cited for unsold units are ‘the unreleased Bumiputra
22 Building & Investment | www.b-i.biz
Quota’, ‘low demand/interest’ (i.e., level of confidence, if not,
pessimism, in the economy).
Business Operations
As in past, developers continue to lament increased costs of doing
business, with some having to resort to cost-cutting measures
such as less benefits/perks to buyers, freezing recruitment or
retrenchment. In production/delivery, project launches have been
re-scheduled or scaled down, reverted to low-end development
and delayed or cancelled due to inefficient funding and demand,
respectively. In construction, the issues of labour (high wages,
unskilled and supply shortage) and building materials (high
process, inconsistency and shortage of supply) continue to rankle,
e.g., sand and brick. Also, aside from ‘no economy of scale (28%)’
and ‘availability of skilled workers (25%)’, the Survey viewed
Industrialised Building System (IBS) as costing more (34%) than
conventional methods’ - a case, if ever there was one, to engage
the Government and its agencies and resolve.
2016 Outlook
Whilst more than half (68%) of respondents are pessimistic
about the industry in 1st half of 2016 given the current economic
climate and weak market sentiments, the other school of
thought is that the property market is cyclical, and the demand
for residential property is unwavering. Expectations, therefore,
are for things to pick up in 2nd half of 2016 in tandem with an
improved economy. ■