In a latest survey from the Real Estate and Housing Developers Association (REHDA), it has shown that sales for the first half of 2015 is 9% lower than same period last year. A further breakdown revealed that out of the 10,877 units which were launched in H1 2015, only 4,374 or 40 percent were sold. In case you think the housing bubble in Malaysia is building up, do note that this kind of stats do not reflect a bursting bubble. Best selling were all LANDED ones. They are the double and triple-storey units but the apartments and condominiums are facing a bad time, only 779 units sold out of 4,259 units which was launched. This is unbelievable, it meant only 18 percent were sold? No wonder REHDA said that the developers are now feeling neutral at best and naturally pessimistic on the local property market. Their two main reasons are due to increasing costs and rising number of unsold properties.
I have a friend who has only bought landed properties thus far and is thinking of high-rise moving forward. Totally opposite of me who has no landed properties thus far. However, based on latest stats, the take-up rate for apartments and condominiums was not even 50%. The survey also showed that unsold units have risen to 78 percent for the first half of this year compared to 64 percent in the first half of 2014. Most of the unsold units are in Kedah, Penang, Selangor and Johor, and mainly in the category of RM500,000 to RM1mil price range. Loan rejections has also increased to 35% compared to 29% previously. Many banks were now only offering between 75% to 80% loans, which meant many may not have built up enough downpayment.
According to President of REHDA, Datuk Seri Fateh Iskandar, 71% of the respondents said that costs had gone up by up to 11% and almost all respondents said that GST had increased cost of doing business. This in turn has pushed up house prices. Besides this, with the weakening of ringgit, certain materials which are imported are also becoming more expensive. Final conclusion however showed that the developers believe that the level of pessimism will reduce in the next 6 months. This is because they would have gotten used to the impact of GST. Of course, I think they are anticipating the buyers would have also gotten used to the GST too.
In the Federal Territory, Selangor, Penang, Johor and Malacca, the properties launched were mostly priced between RM500,001 and RM1mil. Actually this is quite high and I think this may be the reason why many are still thinking and why banks are also pulling back from simply lending. Even majority of all the junior managers may not be able to simply afford a unit between RM500,000 to RM1 million. By the second half however, the residential properties in the Federal Territory will surge to between RM1 million to RM2 million from the current level.
I think unless the sentiment turns more positive, the tough times will continue. Want to know if situations would be better? Read the Facebook comments. Even with a growing economy, a slowing but still growing retail and continuous trade surplus compared to even that largest economy, the current sentiment is considered very negative. It was like Malaysia is already in a crisis. Well, if Malaysia is already in a crisis, the developers would be facing a bleak future because their unsold stock was said to be 78 percent. Will continue to monitor Facebook for the latest sentiment analysis. All the best to the developers. 🙂
written on 18 Sept 2015
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