Rehda: Launches and sales decreased significantly in 1H2016

PETALING JAYA (Sept 14): There has been a significant decrease in new project launches from 9,938 units in 2H2015 to 7,172 units in 1H2016 while sales have dipped from 52% in 2H2015 to 39% in 1H2016, said Real Estate and Housing Developers’ Association (Rehda) president Datuk Seri Fateh Iskandar Mohamed Mansor (pictured) in his presentation of the Rehda property industry survey 1H2016 to the media today.

The survey — held from January to June this year — was carried out by Rehda to assess the property market performance for 1H2016, the property market outlook for 2H2016 and the sentiment of developers about 2H2016. A total 157 members from Rehda across Malaysia participated in the survey.

Fateh noted that developers are adapting to the current market demand by homebuyers and have launched properties which are more sought after in this challenging market.

“Properties priced below RM200,000 have increased nearly two and a half times, taking up a market share of 14% in 1H2016 as compared to 6% in 2H2015. Developers have also scaled down the launches of properties priced above RM1 million. In 1H2016, only 7% of properties in the market were priced above RM1 million while in 2H2015, that figure was 17%,” said Fateh.

He also remarked that there has been a shift of product type in the market in 1H2016.

“2-3 storey terraced houses dominated the demand from homebuyers in 1H2016 as compared to 2H2015 where apartments and condominiums took the lead. Sixty five per cent of the residential units launched in 1H2016 were landed homes as compared to 49% in 2H2015,” Fateh added.

Out of the 6,939 units of residential homes launched in 1H2016, the bulk of the launch were 2-3 storey terraced homes with 2,345 units launched followed by 1,550 units of apartments and condos and 1,022 units of low cost house and flats.

Two thousand, seven hundred and thirteen units of residential homes were sold with the 2-3 storey terraced houses placing first at 1,473 units followed by 548 and 267 units of apartments/condos and serviced apartments sold respectively.

Fateh noted that developers with terraced-home projects priced below RM500,000 are optimistic about the market in 2H2016.

“They [the developers] know that these are the house that the market is looking for and they know that there will be demand for the project after it has been launched,” said Fateh.

Meanwhile, in a different market segment, despite some 1,022 units of low-cost house and flats launched in Ulu Tiram and Tebrau, Johor in 1H2016, none were sold since the commencement of sales in Aug 16, Fateh added.

“Nowadays, homebuyers do not like to be associated with the description “low-cost housing”. It is not that the developers are not launching low-cost houses and flats. There was even an increase from the 914 units launched in 2H2015 and 650 units launched in 1H2015, yet there was zero sales [in Ulu Tiram and Tebrau],” said Fateh.

As for the commercial sector, there was a 30% decrease in the launches of commercial units in 1H2016 (233 units) compared with 2H2015 (331 units).

“However, about 32% of commercial properties priced above RM1.5 million came into the market in 1H2016 as compared to 0% in 2H2015. I do not think that people do not have money to buy properties. Instead, this is a sign that the level of confidence of buyers has dropped. We see that our gross domestic product growth was about 4% in the 1H2016. The numbers do not show that the economy has slowed down. Property is a big ticket item and buyers are just more cautious now,” Fateh added.

Not sure how much you will have to pay a month for your home? Check out our mortgage calculator here.