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REHDA Upbeat on Property Sector
August 22 , 2007
KUALA LUMPUR: Property developers and real estate agents are upbeat on the property sector for the second half of the year (2H07) in spite of the current volatile stock market situation.
The Real Estate and Housing Developers’ Association Malaysia’s (Rehda) deputy president Datuk Michael Yam said the uncertainties in the stock market now are unlikely to dampen the positive sentiment of the property market.
“The investors who have cashed out from the market will want to find somewhere else to invest and property is always the better bet,” he told a media briefing here yesterday on the performance of the property market in 1H07.
Rehda expects the industry sales momentum in 1H07 to continue through 2H07, based on responses from 204 of its members in a survey in Peninsular Malaysia. Rehda has 1,052 members.
In the survey conducted between July 10 and Aug 13, Rehda found that 36% of the respondents showed better sales performance of new projects in 1H07 (versus 25.6% in 2H06 and 14.9% in 1H06).
The survey showed 50.6% recorded the same sales performance in 1H07 (versus 41% in 2H06 and 23.9% in 1H06), while 14.1% were hit by worsening sales (versus 33.3% in 2H06 and 61.2% in 1H06).
Rehda said, looking at the trend, the sales performance of its members had been climbing steadily.
It said 75% of the respondents showed better sales for new projects in the Klang Valley in 1H07 (versus 2H06), while 51% said sales in Selangor were higher.
The majority of the respondents said they had the same sales performance of new projects in Johor (57.8%), Kedah (75.3%), Kelantan (50.9%), Negeri Sembilan (50.7%), Pahang (78.3%) and Penang (61%), while new projects in Melaka and Perak recorded worse sales.
Yam said the government’s liberal policies had played an important role in the improved sales.
“One of the catalysts for the improved sales is the removal of real property gains tax (RPGT) in April this year. House buyers need not face the issue of paying RPGT if they want to realise property gains within three to five years of purchase,” said Yam.
He said more enquiries had been translated into sales as a result of the removal of the RPGT and the trend was likely to continue in 2H07.
“The removal of Foreign Investment Committee (FIC) approvals and non-restriction of the number of units that foreign buyers can purchase are positive steps that helped stimulate the market,” he said.
Yam said other contributing factors included Singapore’s robust economy, availability of loans to foreigners and the country’s improving economy.
He also said the survey found that construction costs in 1H07 escalated by 30% more than the previous half.
“Sharp increases in steel, cement and sand prices are the main contributing factors,” he said, adding that people realised that house prices would not be any cheaper and it was time to buy.
Yam also said due to the increasingly expensive land prices in the Klang Valley, in years to come, enbloc sales and tearing down of older buildings as part of the urban renewal process could be expected as is currently practised in Singapore.
The survey also found that there are 8,064 unsold units of new projects in 1H07, which are mostly properties priced at below RM250,000. Yan said this was probably a result of unsuitable locations.
Source: The Edge
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