Housing developers association forecast pick up in housing sales mid 2021 onwards

KUALA LUMPUR, March 30 ― The Real Estate and Housing Developers Association Malaysia (Rehda) today said that they expect the sales performance of real estate and housing developments to increase in the second half of 2021.

In a survey conducted by Rehda titled Property Survey 2H 2020 and Market Outlook for 1H 2021 and 2H 2021, it said that respondents are mostly pessimistic of the market in the first half of 2021, but are more optimistic of the second half of 2021.

“Amongst the respondents with future launches, the majority of them (83 per cent) anticipated their sales performance to be 50 per cent and below for the first six months.

“Respondents were neutral about the economic and business outlook for 2021, although notably, there were concerns about consumers’ purchasing power in the first half of the year. However, in all cases, there is increased optimism for the second half of 2021,” said Rehda President Datuk Ir. Soam Heng Choon.

He said that 13,037 units are being planned for launch in the first half of 2021, which will consist of 12,874 residential units and 163 commercial units.

“Kedah, Perlis, Negri Sembilan, Pahang and Selangor planned to launch residential units with the RM250,001-RM500,000 price range, whereas Johor, Penang and Kuala Lumpur aimed to offer units priced between RM500,001 to RM700,000,” he said.

Soam added that the Covid-19 pandemic greatly affected the performance of the Malaysian property market, adding sales performance in the second half of 2020 was better than the first half of 2020 due to the implementation of first movement control order (MCO) back in March last year.

“Sales performance was better in 2H 2020, increasing from 43 per cent in 2H 2019 to 45 per cent in the period under review,” he said.

He said that 5,736 residential units sold, 2,467 were in the two to three storey terrace category, making it the most popular choice. This was followed by apartments and condominium units, where 1,082 units were sold in the second half of 2020.

He added that the overall cost of doing business increased by 12 per cent in 2H 2020, according to 51 per cent of their respondents.

“98 per cent of them remarked to have been affected by the current economic situation, and those who are ‘highly and severely affected’ have increased to 42 per cent compared to 26 per cent in 2H 2-19.

“Compliance cost remained the number one cost component affecting cash flow, followed by material and labour costs, as well as land cost,” he said.

Soam then touched on the issue of unsold units, saying that 64 per cent of the respondents reported to have unsold residential units in the period under review, with a majority of them having less than 30 per cent unsold stock for both residential and commercial units.

“End-financing issues continued to be the main reason for loan rejection in 2H 2020, which affected 92 per cent of the respondents. Other top reasons were unreleased Bumiputera units and low demands or interest,” he said.