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Are luxury properties making a comeback despite the slow market?

PETALING JAYA (March 11): Despite developers scaling back on new property launches, the number of new bungalows and garden villa units launched in 2H2015 have jumped to 312 from 24 units in 1H2015, according to the Real Estate Housing Developers Association of Malaysia (Rehda) Property Industry Survey 2H2015.

Of the 312 units launched in 2H2015, 158 were sold, compared with 9 units out of 24 units in 1H2015, the survey showed.

According to Rehda president Datuk Seri Fateh Iskandar Mohamed Mansor who presented the survey findings to the media on Wednesday, there were 10% more residential properties selling above RM1 million, from 7% in 1H2015 to 17% in 2H2015.

“These findings show that the market is gaining confidence for residential properties priced above RM1 million. The market is testing where we stand in terms of economic stability as well as the willingness of the banks to finance such properties,” he noted.

Another similar trend can be seen for semi-detached houses where 480 units were launched in 1H2015 with 179 units sold, compared with 640 units launched in 2H2015 with 237 units sold.

Meanwhile, according to the survey, 2H2015 saw 914 low-cost houses and flat units launched, up by 264 units from 650 in 1H2015.

Sales also improved with 601 units of low-cost houses and flat units sold compared to 466 units sold.

“It is not true to say that private developers do not build low-cost houses as it is clearly shown from the launch figures that we do,” he said.

“We do provide lost-cost houses even though it is priced at RM35,000 in district councils and RM42,000 in municipal councils – prices which have not been adjusted since 1997 despite the rise in cost,” he added.

Meanwhile, launches for single-storey terraced houses also increased from 706 units in 1H2015 to 1,050 units in 2H2015, while units sold doubled to 616 units in 2H2015.

However, 2 and 3-storey terraced houses saw a drop in new units launched – from 3,918 units in 1H2015 to 2,509 units in 2H2015.

Sales of these homes also declined from 2,385 units in 1H2015 to 1,365 units in 2H2015.

“What this means is essentially, developers find price sensitivity is such a major component for homebuyers these days. Single story terraced houses are cheaper than 2 and 3-storey terraced houses, so we are working on offering smaller products for buyers,” Fateh commented.

Meanwhile, serviced apartments saw a decrease in launches from 513 units in 1H2015 to 352 units in 2H2015, and likewise for apartments and condominiums – 4,259 units launched in 1H2015 to 3,830 units launched in 2H2015.

“Developers are holding back their launches due to the high loan rejection rate and end financing from the banks,” he noted.

However, sales for serviced apartments increased from 100 units in 1H2015 to 216 units in 2H2015 while apartments and condominiums saw sales increase from 779 units in 1H2015 to 1,844 units in 2H2015.

“Despite the drop in supply, the demand is still strong from the public. High-rise homes remain one of the most sought-after residential properties due to land scarcity,” he noted.

According to the survey, both 2H2015 and 1H2015 saw apartments and condominiums still being the top residential type sought after by homebuyers.

The survey – held from July to December last year – was carried out by Rehda to assess the property market performance for 2H2015, the property market outlook for 1H2016 and the sentiment of developers on 2H2016.

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