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       KUALA LUMPUR: Property developers in the country are more optimistic about the second half of 2022 compared with the first half, according to a latest survey by the Real Estate and Housing Developers Association (Rehda).

       Acting president Datuk N.K. Tong said the country is moving towards the reopening of its borders and economy and this is positive for the property industry.

       “Beginning April, as more travel restrictions are lifted, it will give a sense of return to what it was before,” said Tong, referring to the country’s transition to the endemic phase and further easing of restrictions for travellers entering Malaysia starting April 1.

       Tong was speaking at an online briefing on Rehda’s property industry survey for second-half 2021 and market outlook for 2022, which involved 124 respondents consisting of it members in the Peninsular Malaysia.

       “While this is a voluntary survey that attracted 124 respondents from our membership base of over 1,500 and therefore will not capture the full statistics, it nonetheless serves as a useful guide and a good reflection of the sentiment in the property industry,” added Tong.

       Acting president Datuk N.K. Tong said the country is moving towards the reopening of its borders and economy and this is positive for the property industry.

       In the survey, 79% of respondents remarked that in the second half of 2021, overall costs of doing business increased up to 18%, the highest since the past five years.

       Meanwhile, 96% of respondents said they are affected by the current economic scenario. The top three components affecting cashflow were material and labour costs, compliance cost as well as financing and land costs which shared the number three spot.

       Tong said that going forward, there may be some pressure on property developers to keep up with rising operating costs.

       He explained that while developers had continued to launch products and made profits in the second half of 2021, “it could be that they were using some of the historical inventory (the low hanging fruit), maybe they have some cheap land somewhere that they are launching first.”

       “Moving forward, as the low hanging fruit is absorbed and the cheaper land stock is depleted, you may see some pressure to keep up with the rising costs,” said Tong.

       Mah Sing Group Bhd CEO Datuk Ho Hon Sang said property developers wanting to increase product prices would need the support of financial institutions and valuers.

       “Otherwise, financing will be difficult and even though the price increases, the take-up rate will suffer,” said Ho.

       S P Setia Bhd executive vice-president Datuk Zaini Yusoff said the property industry “may have not seen the worst in terms of rising raw material costs, depending on the global situation.”

       “We have to do a lot of value engineering, so that we can at least curb the property price increases. If we increase prices, this may not go in tandem with getting loans from the bank. We have to strike the balance,” said Zaini.

       The survey also found that 51% of the respondents are planning to launch projects in the first half of 2022, totalling 24,557 units (17,969 strata residential units; 5,997 landed residential and 591 commercial).

       Of those with planned launches, 77% expected their sales performance to be 50% and below for the first half of 2022.

       Most states aimed to launch residential units within the RM250,001 to RM500,000 price range.

       Johor, Selangor and Penang, on the other hand, will have mostly units priced between RM500,001 to RM700,000 in their 2022 offerings.

       Meanwhile, the survey found an increase in sales performance in the second half of 2021 compared to the first half; however, a decline was reported in launched units.

       In the second half of 2021, a total of 10,665 units were launched, which was 8% lower than the first half of 2021 (11,601 units).

       The majority of these units were residential, totalling 10,631, priced from RM250,001 to RM700,000.

       In terms of house types, two and three-storey terrace proved to be the most popular at 3,165 units, mostly located in Seremban; followed by apartments and condominiums (2,909) and serviced apartments (2,363).

       Despite the lower number of launched units, sales increased from 39% to 50% (second half of 2021: 5,303 units; first half of 2021: 4,540), with only 22 of them comprising commercial units (first half of 2021: 121).

       The top performers type-wise were similar to the launched units, namely two and-three storey terrace (2,213 units), also mostly located in Seremban; apartments and condominiums (961 units) and serviced apartment (804 units).

       In the second half of 2021, first-time home buyers continued to be the highest number of purchasers (42%), followed by upgraders (36%), investors (21%) and company (1%).

       Also, 67 respondents (54%) in the survey having unsold units reported to have 30% and below of unsold residential units within their developments, mostly affecting units priced between RM250,001 and RM500,000, and between RM500,001 and RM700,000 (39% and 18%, respectively).

       About 64% of the respondents with unsold units cited that their unsold completed properties are more than two years old.

       They identified loan rejection, low demand or interest, and unreleased bumiputra units as the top three reasons for the unsold units.