Real Estate and Housing Developers’ Association (Rehda) had recently urged Bank Negara to relax the terms of loan financing for first-time homebuyers and purchasers of affordable houses.
Stating that the difficulty of end-financing and issue of loan rejection were the number one reason that resulted in soft property market, Rehda president Datuk Seri FD Iskandar said that the loan rejection rate of 68%, has for the first time resulted in it being the top reason for unsold units during the second half of 2015, according to a survey done by Rehda.
He said the loan rejection rate increased significantly from 52% during the first half of 2015, when the unreleased bumiputera quota constituted the main reason of unsold units.
He also said that the government should also consider reinstating the Developers Interest Bearing Scheme (DIBS) for the aforementioned group of buyers, stating that 62% respondents of the survey agreed with the sentiment.
Rehda Malaysia revealed the findings of its Rehda Property Industry Survey 2H 2015 at the Rehda Media briefing on Wednesday, March 9. The survey respondents comprised Rehda members from all 12 states across Peninsular Malaysia, and gauged the property market performance for the second half of 2015 and the outlook for 2016 while finding out the challenges faced by members in the current softening market.
While Malaysia personal household debt at 86.8% of gross development product was considered one of the highest in the region, it was important to consider the segmentation of the debt, he said.
He explained that the major component of this household debt included house mortgages (around 30%), car loans (around 20%) and credit card or personal debt. While house properties gained value over the years, the rest of the segments would see a substantial or total loss, and the Bank Negara should encourage the citizens to build a portfolio that builds wealth.
According to the survey, the percentage of respondents with projects and units launched in 2H 2015 has seen a reduction compared to the previous half, although sales performance has seen improvements, with increased number of respondents reporting better sales mainly on the apartment or condominium units.
Residential properties continued to lead newly launched developments, albeit at a reduced numbers, while commercial units recorded a slight increase.
The survey indicated that domestic buyers continued to lead the residential market, while buyers purchasing for investment purposes have decreased from 23% in 1H 2015 to 13% in 2H 2015.
The strata launches has overtaken landed properties by only 1%, most strata properties were based in Selangor and Kuala Lumpur.
According to the survey, cost of business operations increased as 61% respondents has reported increased cost up to 10%, prompting them to implement various cost-cutting measures.
In general, almost 70% of the survey respondents were pessimistic on the 1H 2016 outlook, though it is anticipated that the level of pessimism will reduce to a more neutral sentiment in the following 6 months.