PETALING JAYA: The property market in Malaysia remains resilient, according to the Real Estate and Housing Developers’ Association (Rehda) Malaysia.
The optimism is based on higher demand from buyers and rising optimism that led to more new launches by developers in the second half of 2022. Nonetheless, caution still prevails.
The survey showed that there was a 23% increase in new launches during the period compared with the previous six months. That translated into 9,669 units of property, of which 97% were residential units dominated by serviced apartments and condominiums.
Sales also showed an improvement, with the number of transactions recording a 9% increase in the last six months of the year compared with the first half.
Rehda Malaysia president NK Tong said survey participants also displayed a particular optimism for the first half of 2023.
Nonetheless, he cautioned against comparing property with shopping and eating out, pointing out that it takes longer to make a decision on a property purchase than it does for shopping or dining.
But the signs are positive. “The economy is now fully opened for businesses again and we also have a new unity government,” he said when unveiling the results of the survey today.
He said consumers have been “testing the waters” since the new government was formed.
“The new government has been focussed on doing right by the rakyat. Therefore, the sentiment will continue to improve as buyers are looking to commit to property purchases,” he added.
The Rehda survey also highlighted the issue of the increased cost of doing business, specifically the rising cost of materials that has been exacerbated by a protracted hike in energy prices and the stuttering global economy.
Touching on costs, Rehda deputy president Ho Hon Sang disagreed with the view that expanding the number of industrialised building system (IBS) homes would help developers address increases in costs.
Ho said Malaysia still does not have enough workers well-trained and skilled in IBS.
IBS homes are those that are built according to specifications inside a factory to be assembled on site later.
Tong said that while inflation remains a concern, even with Bank Negara Malaysia’s decision to call a pause in the overnight policy rate (OPR) hike, it could have a positive impact on the property market.
“At some point, people will look to invest in assets that can help to cushion them against inflation. Some may put their money in gold, but many prefer to invest in a roof over their heads,” he said.
On the same matter, Ho said that even with a 100-basis-points rise in the OPR, the median increase in loan repayments is only RM92.
“Added to the fact that the central bank is in touch with commercial banks about loan repayments, the situation is not drastically adverse,” he said.
Tong said Rehda’s wish list for the new budget for 2023 include reducing compliance cost for developers to help them offset the increase in costs of labour and materials.
Rehda also wants the government to encourage banks to introduce more step-up financing and lease to buy schemes.
On the issue of rising costs, Tong said the increases were in double digits but acknowledged that they have declined in the past six months.
The Rehda survey also highlighted the increased usage of digital marketing by developers, accounting for 2.41% of gross development value per respondent of the survey.
“There is no moving back from digital marketing, but many developers will continue to set up physical sales galleries because many people still want to visit a show unit,” Ho said.
“They just want to see and feel the property for themselves before making a commitment,” he added.