KUALA LUMPUR (June 15): Property developer Hua Yang Bhd remains confident that its projects will continue to do well despite the difficult outlook for the sector, moving forward, as it focuses on affordable offerings.
In an email interview with The Edge Financial Daily, Hua Yang chief executive officer Ho Wen Yan said the operating landscape of the property industry is more challenging now compared with a few years ago, due to a variety of factors ranging from macroeconomic developments to the impact of the government’s fiscal consolidation policies.
Ho said Hua Yang’s confidence stems from the fact that demand for quality and affordable homes, especially those that cater to the middle-income and younger market segment, will continue to increase at a rapid pace as a result of continued economic progress and urbanisation.
“All in all, we are aware of the challenging backdrop, but we remain confident that we will continue to perform well as the affordable housing segment holds opportunities for growth,” he said.
Meanwhile, on measures by the authorities to curb property market speculation, Ho said the market is currently undergoing a transitional period of adjustment, and that normality will return to the sector in the foreseeable future.
However, he said Hua Yang does not expect efforts by policymakers and regulators to curb speculation and enhance more responsible lending to impact its business significantly, as Hua Yang’s focus continues to be on the affordable market.
“This market is primarily made up of the middle-income segment and young professionals, who are at the start of their careers, and are looking for a home that they can start a family with and have a better quality of life,” he said.
On the slowdown of the Johor property market, Ho said it will have more of an adverse impact on higher-end property projects targeted at foreign buyers.
“Our projects in Johor are all targeted at local buyers,” he said.
He said Johor Baru continues to hold significant potential for Hua Yang, as he believes that demand from the affordable market will continue to grow as the state continues to draw in investments and economic activities remain robust.
“Our township developments in Johor, namely Taman Pulai Hijauan and Taman Pulai Indah, continue to enjoy strong sales. Citywoods, our freehold serviced apartments, are delivering encouraging sales,” he said.
As to how the company is dealing with the rising cost of doing business, Ho said Hua Yang had locked in prices of construction work and materials for projects that have been launched and currently ongoing, so it does not foresee price fluctuation in terms of costs of its products.
“We can, therefore, ensure that we are provided with quality raw materials for our projects at a reasonable rate, on top of our ability in value engineering.
“Nonetheless, we do monitor cost prices diligently, and we do communicate and negotiate consistently with our suppliers and contractors to ensure efficient pricing of our building materials,” he said.
This article first appeared in The Edge Financial Daily, on June 15, 2015.