• “Twenty years ago, when you launch a property, it was easily sold within a few weeks. But today, the environment is a little different because people have choices. Access to financing too is tricky.”

KUALA LUMPUR (Feb 22): About 94% of developers polled by the Real Estate and Housing Developers’ Association Malaysia (Rehda) said they continued to face end-financing issues for buyers in the second half of 2022 (2H2022).

According to the Rehda Property Industry Survey 2H2022, respondents revealed that the top three reasons for end-financing rejections were ineligibility due to buyer’s income, buyers being offered lower margin of financing by banks, and adverse buyer’s credit history.

The survey also found that 61% of developers reported to have unsold residential units with a majority of them priced above RM1 million (23%), followed by units within the RM400,001-RM500,000 price range (15%) and RM500,001-RM600,000 (11%).

“Top reasons for these unsold units are... end-financing issues, unreleased Bumiputera lots and low demand.

“Twenty years ago, when you launch a property, it was easily sold within a few weeks. But today, the environment is a little different because people have choices. Access to financing too is tricky. As we come out of pandemic, and we now have a new government with the right moves [which] might boost confidence and this will contribute to speed of sales, [which] will accelerate,” said Rehda president Datuk NK Tong (pictured) at the media briefing of Rehda Property Industry Survey 2H2022 and Market Outlook for 2023 on Wednesday (Feb 22).

He added sales performance for 2H2022 increased to 54% or 5,239 units from 49% in 1H2022, driven mainly by sales in the 2-3 storey terrace segment with 1,622 units sold.

A majority of these properties were located at Seremban and Johor Bahru, while serviced apartments trailed in second at 1,414 units with apartment/condominium at a distant third (507 units).

Tong added the overall cost of doing business for developers also went up by 13% in 2H2022 as the three main cost components affecting cash flow were material and labour cost, compliance cost and land cost.

“Ninety-four percent of respondents said [they would] be affected by the current economic scenario, and have taken various cost-cutting measures, including freezing recruitment, reducing salary, rescheduling the launch of planned projects and reducing the scale of launches,” he added.

Overall, 2H2022 saw the launching of 9,669 units, an increase of 23% from 7,843 units in 1H2022.

Ninety-seven percent of the launches were residential, mostly serviced apartments (2,670 units), followed by 2-3 storey terraces (2,610 units) and apartment condominiums (1,748 units).

For 2023, Rehda is mostly optimistic for the second half of the year supported by improving macros.

“We are hopeful that the property industry will continue to flourish under the unity government, whose proactive approach has helped resolve pressing issues such as the labour shortage.

“We hope that the government will remain cognisant of other concerns within the industry, particularly [those] pertaining to homeownership for the rakyat,” said Tong.

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