Property developers in West Malaysia reported a 26% decline in unit launches and a 5% sales drop in the first half of 2022 (1H2022) from the second half of last year (2H2021), according to Real Estate and Housing Developers’ Association (Rehda) Malaysia.
Rehda’s survey of 150 respondents released on Wednesday (Oct 12) found that 7,843 units were launched in 1H2022, of which 45% or 3,549 units were sold in the same period.
The association’s president Datuk NK Tong, who presented the data, said sales performance has trended downwards because 50% or 5,303 units were sold in 2H2021 from the 10,665 launched units during then.
The majority of launches in 1H2022 were residential properties at 94% or 7,287 units. Commercial properties made up the remaining 6%, Tong said.
The most launched property type in 1H2022 are two- to three-storey terraced houses at 3,884 units, followed by serviced apartments (1,783 units) and single-storey terrace houses (495 units), he said.
Tong added that the most sold property type in 1H2022 is also the two- to three-storey terraced houses (2,365 units), with most of them located in Seremban, Negeri Sembilan and Jasin, Melaka.
Trailing at a distance in sales are commercial units at 367 units and single-storey terrace houses at 331 units, he said.
First-time homebuyers made up almost half of property buyers in 1H2022 at 42%, followed by upgraders at 36% and investors at 21%, Tong said.
The top purposes for bought units are for self-dwelling (46%) or for family members (29%), he said.
He stated that most of the residential launches in 1H2022 were priced at RM250,001 to RM500,000 (53%), while most of the unsold units were priced at RM500,001 to RM600,000 (29%).
Tong said the top reasons for unsold units are end-financing loan rejections, unreleased Bumiputera lots and either high pricing or low demand.
Many developers also struggled with financing issues (87%) in 1H2022, of which 78% of respondents faced end-financing issues for buyers and 13% faced bridging financing issues, he said.
In terms of business operations for developers, Tong said the overall cost of doing business has increased an average of 17% in 1H2022.
He pointed out that at least 24% indicated that they are “highly affected” or “severely affected” by the current economic scenario.
Respondents said the top cost components affecting cash flow in 1H2022 are material and labour cost, compliance cost and land cost, Tong shared.