Kuala Lumpur, 23 April 2021 – The global pandemic has contributed considerably on the lacklustre performance of the Malaysian property market. This is evident from the results of the Real Estate & Housing Developers’ Association (REHDA) property industry survey for the second half (2H) 2020. Only a slight increase of launched units was recorded (0.7 per cent) amongst the 134 respondents, with a 2 percentage points increase in sales performance.
The second half of 2020 saw the launch of 12,640 residential units compared to 12,556 units in 2H 2019, with two- and three-storey terrace houses being the most popular offering (4,120 units) followed by serviced apartment (3,250 units) and apartment/condominium (3,059 units). Price-wise, 80.8 per cent of the units were in the range of RM250,001-RM500,000 and RM500,001-RM700,000, while 7.8 per cent were within the RM100,000-RM250,000 range and 6.4 per cent were priced between RM700,001 to RM1 million.
Sales performance was better in 2H 2020, increasing from 43 per cent in 2H 2019 to 45 per cent in the period under review. Out of the 5,736 residential units sold, 2,467 units were in the 2-3 storey terrace category, making it the most popular choice. The second top performing type was serviced apartment with 1,225 units while 1,082 units of apartment/condominium were sold in 2H 2020. First-time buyers made up a majority of purchasers in the period under review, and most homes bought were for the purpose of self-dwelling, purchasing for family members and for investment.
Sixty-four per cent of 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 types. At 30 per cent, terrace house had the highest percentage of unsold residential type, followed by semi-detached/bungalow at 29 per cent and apartment/condominium at 26 per cent. End-financing issues continued to be the main reason for loan rejection in 2H 2020, which affected 92 per cent of respondents. Other top reasons were unreleased Bumiputera units and low demand/interest.
Overall cost of doing business increased by 12 per cent in 2H 2020, according to 51 per cent of the respondents. 98 per cent of them remarked to have been affected by the current economic scenario, and those who are severely affected have increased to 42 per cent compared to 26 per cent in 2H 2019. Compliance cost remained the number one cost component affecting cash flow, followed by material and cost labour, as well as land cost.
Future Launches and Outlook for 2021
In total, 13,037 units are being planned for launch in 1H 2021, consisting of 12,874 residential units (6,998 strata units and 5,876 landed units) and 163 commercial units. Amongst respondents with future launches, majority of them (83 per cent) anticipated their sales performance to be 50 per cent and below for the first 6 months. Kedah/Perlis, Negeri Sembilan, Pahang and Selangor planned to launch residential units within the RM250,001-RM500,000 price range, whereas three states (Johor, Penang and Wilayah Persekutuan Kuala Lumpur) aimed to offer units priced between RM500,001-RM700,000.
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. The same was reported with the property industry outlook, specifically with regards to residential sector growth. However, in both cases there are increased optimism for 2H 2021.
– Construction+ Online