Rehda hopes for expansionary Budget to spur spending

PETALING JAYA (Sept 26): The Real Estate and Housing Developers' Association Malaysia (Rehda) is cautiously optimistic about the market outlook for the next 12 months and looks forward to an expansionary Budget 2020 which will be tabled on Oct 11, 2019.

Rehda president Datuk Soam Heng Choon said there are many uncertainties that could affect market sentiments and decision making, for instance Brexit, the US and China trade war and a possible interest rate cut by Bank Negara Malaysia.

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Hence, a majority of the respondents to Rehda’s Property Industry Survey 1H 2019 and Market Outlook 2H2019 and 1H2020 showed that 49% of the 144 respondents (Rehda members) from Peninsula Malaysia were neutral when asked about the residential property market outlook for this year’s second half.

About 34% out of the 144 respondents were pessimistic about the residential sector for 2H2019, with only 14% saying they were optimistic.

On their outlook for 1H2020, the number of respondents who were optimistic increased to 23%. About 56% took a neutral view while 20% remained pessimistic.

“Industry players expect market sentiments to improve in the first half of next year, driven by seasonal effects such as Chinese New Year, companies giving out bonuses or salary increments which could help boost property sales,” said Soam.

Another reason to be optimistic is the hope for an expansionary Budget 2020 that will encourage more spending, he told reporters during a media briefing on the Rehda survey today.

The sample size of 144 respondents represented 15% of Rehda’s 1,000-odd members.

Also present at the media briefing were Rehda vice-president Datuk N K Tong, national treasurer Datuk Muztaza Mohamad, deputy president Datuk Khor Chap Jen and secretary general Tiah Ooi Ling.

New launches decrease but sales improve

The survey also showed that the respondents had reduced the number of new launches in the first six months of 2019 compared with the same period last year.

“Respondents who had launches were down by 4% while the number of units launched were down by 11.6% year-on-year. Sales performance, however, went up by 15%,” said Soam, adding that developers have adjusted their product types to suit current buyers’ needs amidst the weak market conditions.

New launches in 1H2019 were mainly 2- and 3-storey terraced houses followed by high-rise residences – serviced apartments and condominiums.

Soam noted that 46% of the respondents’ new projects were priced below RM500,000 while 32% launched properties priced between RM500,001 and RM700,000 and another 21% had new launches in the range of RM700,001 to RM1 million.

“Only 1% launched properties above RM1 million which are mostly bungalows or penthouses,” he added.

In total, the 144 respondents have launched 10,574 units in 1H2019 of which a total of 6,157 units were sold, equivalent to a sales performance of 58% compared with 43% in 2H2018, said Soam.