Rehda: Local housing developers have had unsold completed units for more than two years

 By Sharen Kaur - March 15, 2022 

NSTP/File Photo

Housing developers have unsold completed units sitting on the market for more than two years.

This is based on responses from 124 members of the Real Estate and Housing Developers' Association Malaysia (Rehda), who completed the association's latest Rehda Property Industry Survey for 2H2021.

According to the survey, which was virtually presented today by Rehda acting president Datuk NK Tong, 67 respondents (54 per cent) have 30 per cent or fewer unsold residential units.

The majority (39 per cent) were units priced between RM250,001 and RM500,000, with the remaining (18 per cent) priced between RM500,001 and RM700,000.

According to the survey, 64 per cent of respondents with unsold completed units stated that the properties are more than two years old.

Loan rejection, low demand/interest, and unreleased Bumiputera units were the top three reasons for unsold completed units.

Rehda acting president Datuk N K Tong. File Photo

Meanwhile, 96 per cent of respondents said the current economic situation has an impact on them.

Material and labour costs, compliance costs, and financing and land costs ranked first, second, and third, respectively, in terms of cash flow impact.

According to Tong, 79 per cent of respondents reported that overall business costs increased by 18 per cent during the study period, the highest increase in the previous five years.

Among other things, the survey discovered an increase in sales performance in the second half of 2021 compared to the first half of 2021, but a decrease in launched units.

In the review period, 10,665 units were launched, which was eight per cent less than in the first half of 2021 (11,601 units). A total of 10,631 units were residential, priced between RM250,001 and RM700,000.

Two to three-story terraced units were the most popular house type, accounting for 3,165 units. They were primarily concentrated in Seremban, followed by apartment/condominium and serviced apartment buildings, with 2,909 and 2,363 units, respectively.

"While this is a voluntary survey that attracted 124 respondents from our membership base of over 1,500 and therefore will not capture the full statistics, it nonetheless serves as a useful guide and a good reflection of the sentiment in the property industry," Tong said.

While the results reflect the industry's challenges, he was encouraged by the improving sentiment and outlook in the second half of 2022, as developers put the pandemic of the previous two years behind them to focus on nation-building efforts of housing the Rakyat.

According to him, respondents expected the first half of 2022 to be subdued, with greater optimism for the second half of 2022.

Fifty-one per cent of the 124 respondents polled planned to launch their projects within the first six months of 2022.

The top reasons the remaining respondents who were not planning to launch projects were unfavourable market conditions and the ongoing impact of the Covid-19 pandemic.

Seventy-seven per cent of respondents with planned launches expected their sales performance to be 50 per cent or lower for the first six months after the launch.

According to the survey, at least 17,969 strata units, 5,997 landed units, and 591 commercial properties will be launched in the first six months of this year.

The majority of future launches will be priced between RM250,001 and RM500,000 in most states and between RM500,001 and RM700,000 in more urban areas such as Johor, Selangor, and Penang.