A research revealed that even though local home builders launched more affordable homes costing RM500,000 and below in 1H 2018, sales was virtually unchanged compared to the prior six-month period, reported the Sun Daily.
According to REHDA’s latest Property Industry Survey, home sales in the first half reached 6,764 units compared to 6,760 units in 2H 2017. Notably, developers launched 13,233 units of residential and commercial properties in 1H 2018 versus 15,082 units six months ago.
Of the 6,764 units shifted by developers, two- and three-storey terrace houses were the most sought-after, with 2,858 units sold versus with 2,779 units previously. The second most in demand were condos/apartments as developers sold 2,047 units, up from 753 units sold six months ago.
REHDA President Datuk Soam Heng Choon said that out of the total numbers of units launched in 1H 2018, 12,522 flats cost between RM100,001 and RM700,000, as builders opted to launch lower-priced units to meet the demand in this segment.
“We hope the worst is over. If you look at the government’s call for us to launch affordable houses, you can see that the units going up are below RM500,000. We are aligning our business to what the buyer wants and what they can afford,” Soam said on Wednesday (10 Oct).
Based on the survey, 47 percent of the 152 developers that took part in the study included low-cost homes costing from RM100,000 to RM500,000 in their projects during the first half of the year. Likewise, most of the launches for 2H 2018 are within the same price range, but those in Penang and Selangor cost up to RM700,000.
Meanwhile, 75 percent of the developers that took part in the survey had unsold stock as of the first half of 2018, with most of them saying that up to 30 percent of the units have yet to find any buyer.
For the high overhang, the respondents blamed unsold bumiputra units, rejection of housing loans of buyers or lower loan-to-value for mortgage.
“For unsold bumiputra units, Penang and Selangor have an auto-release mechanism. We appeal to all other states to seriously look at this (and adopt a similar rule),” he said, adding that the state of unsold homes is expected to worsen over time, making them harder to eventually dispose.
He noted that slashing compliance cost by exempting developers from capital contribution for building utility facilities is anticipated to significantly lower residential prices than exempting construction materials and services from the sales and service tax.
This is because compliance cost account for 15 percent to 20 percent to a company’s cost in building houses and it impacts developers’ cash flow.
In addition, REHDA members said the top three catalysts that can boost the construction of low-cost residential properties are a reduction in development charges, lowering of land conversion premiums, and exempting developers from capital contribution for building utility facilities.
On Maybank Kim Eng’s proposal to increase the stamp duty for overseas buyers, he said it’s unlikely to have a significant impact as such group only account for about three percent of all property buyers in the country.
This article was edited by the editorial team of PropertyGuru. To contact them about this or other stories email editorialteam@propertyguru.com.my
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