BY NG PAU LING email@example.com
Malaysia is having a population of 32.3mil with an average of four members per household; we still need 3 million more homes.
MALAYSIAN developers are expected to launch more units in the first-half of 2018 (1H2018), despite the majority of them making a neutral stand towards the economy and industry outlook, according to Rehda Property Industry Survey 2H2017 and Market Outlook 2018.
The survey was conducted by Real Estate and Housing Developers’ Association (Rehda), involving over 200 Rehda members in peninsular Malaysia.
The findings revealed significant increases in the number of newly launched residential and commercial properties, which grew to 15,082 units in 2H2017 compared to 9,089 in 1H2017. This is the highest record for the past six quarters.
34% of the respondents had launched their projects in 2H2017, and 55% of them are planning to roll out new products in 1H2018 with an estimate of 27,853 units.
More new launches on landed properties in 2017
Among the new launches in 2H2017, the residential segment took up a total of 14,663 units or 92% of the total units.
“Last year, landed properties overtook the strata-type in terms of units launched, in which 53% or 7,779 units were landed houses, in comparison to 47% (4,079 units) in the preceding period,” said Rehda president Datuk Seri FD Iskandar during the presentation of the report.
Two to three storey terraced houses were among the most launched residential property type in 2017, followed by serviced apartments, apartments and condo.
He further added that 52% of the newly launched residential properties had fallen under the affordable price range of below RM500,000. Meanwhile, 41% or 81 of the respondents included more than 30% of affordable housing components in their developments in 2H2017.
Malaysians require more homes
“According to the Department of Statistic Malaysia, our population stood at 32.3mil in the fourth quarter last year.
“As a common Malaysian household has around four family members on average, we need an estimate of 8mil homes to house all of them,” said Iskandar, adding that the recent National Property Information Center (Napic) report has shown that there are only 5.3mil existing residential properties in the market.
“That means our country is still short of about 3mil units of residential products,” he said.
According to Iskandar, Rehda has concurred with Bank Negara on the oversupply and overhang of retail, offices and commercial projects.
However, there is still a considerable demand for residential properties, prompting Rehda’s appeal to the government to ease the financing of residential buyers, especially for purchases below RM500,000.
Iskandar stated that end-financing loan rejection was cited as the top factor for most of the unsold units in the past two years. This is followed by low market demand and unreleased Bumiputera units.
“45% of the loan rejected were from properties priced RM500,000 and below.
“The top three factors for rejection were the ineligibility of buyers’ income, lower margin financing and the bank’s request for more documents,” said Iskandar.
Cooling measures on non-housing loans
On the other hand, the household debt remained as the most prominent risk to the country’s economy.
Although Malaysia’s household debt has declined to 84.6% in 2017 from 88.4% a year ago, Rehda suggested that this level could be further reduced by the enforcement of cooling measures on depreciative, non-housing loans.
“Currently housing loan represents 52% of the total household debts in Malaysia.
“It’s time for the government to enforce cooling measures on depreciative non-housing loans such as car loan, personal loan and credit card loan,” said Iskandar, adding that 26.63% of bankruptcy in Malaysia was caused by car loans. This is followed by personal loans at 25.48%, housing loans at 16.87% and business loans at 10.24%.
The Year 2018 makes a neutral stand
Moving forward, more than 40% of the respondents were neutral towards the 2018 economy and property industry. However, the overall sentiment on the property market improved slightly with increased optimism and a rise in proposed new projects.
Fifty-five percent of the respondents planned to roll out new projects in 1H2018, which included 27,125 residential units and 728 commercial properties.
However, 92 of the respondents anticipated a take-up rate of 50% and below within a period of six months. Findings from the survey showed that 99% of the property buyers are local with 84% of them buying for owner-occupation purposes.