Rehda disagrees with Khazanah institute's housing market 'findings'

Khazanah Research Institute (KRI), which said the Malaysian housing market is "seriously unaffordable", should consider other factors that affect the property industry in its research on housing, said the Real Estate and Housing Developers' Association Malaysia (Rehda).

"There are a lot more factors that have to be taken into account. As it is, KRI has already written to meet us. So let us meet with them first and, after that, both of us will come out with a press statement ... there are a few other factors which they should take into account rather than going on only three or four factors. In the property industry, there is at least 12 main factors," Rehda president Datuk Seri Fateh Iskandar Mohamed Mansor told reporters at a press conference last Friday.

He stressed the need for a single body that promotes and provides affordable homes, instead of having various similar agencies and schemes such as 1Malaysia People's Housing Programme and Syarikat Perumahan Negara Bhd.

"If we can work as one and there's one body that actually promotes affordable homes, at the end of the day the objective is the same – to provide affordable homes for Malaysians," Fateh Iskandar said.

He also suggested that the government, when planning for development on government-owned land, to consider setting aside 50% of the land for affordable homes.

"Every time the state or federal government has a piece of land, they want to monetise it. But maybe, they should start looking at half of the piece of land, put it as a condition to build affordable homes. When you do that, in a lot of places, you will have affordable homes," he said.

Last month, KRI shared the findings in its research report titled "Making Housing Affordable" which revealed a median house price of 4.4 times the median annual household income compared with an affordable market where the median house price is 3.0 times median household income.

The report highlighted Kuala Lumpur and Penang as "severely unaffordable" markets with 5.4 times and 5.2 times median household income respectively.

Commenting on KRI's report, Fateh Iskandar said properties within the RM200,001 and RM500,000 range are still leading the market, with residential properties below RM500,000 still available in various locations. "There are still properties within the RM500,000 range in certain hotspots."

In Selangor, he said, homes below RM500,000 are still available in areas such as Pengerang, Teluk Gong, Dengkil, Hulu Langat, Kajang and Teluk Pulai.

According to Rehda's Property Industry Survey for the first half of 2015 (1H2015), the majority of launches among Kuala Lumpur and Selangor developers surveyed were within the RM500,001 and RM1 million range, which has been the trend for the last 30 months.

However, Fateh Iskandar warned that the drop in supply would push prices up. Of the total 125 Rehda members who participated in the survey, 50% said they planned launches in the second half of 2015 (2H2015) while 50% said they had no launches planned.

"This is a worrying trend because demand is still very strong. If there is no supply, homes that are priced RM500,000 today will go up. The level of confidence needs to be improved. We hope for some incentives in Budget 2016," he said.

The outlook on sales in 2H2015 was subdued, with only 31% of respondents anticipating sales above 50%. The majority of respondents (36%) indicated sales performance of between 26% and 50% for 2H2015.

In terms of selling prices, developers in most states said their 2H2015 launches would be within the same price range as in 1H2015, except for Kuala Lumpur and Kelantan.

These developers expect to sell more expensive properties priced RM1 million to RM2 million and RM200,001 to RM500,000 respectively in 2H2015. In 1H2015, these developers launched properties within the RM500,001 to RM1 million range in Kuala Lumpur and below RM200,000 in Kelantan.

The survey showed that developers launched 10,877 units in 1H2015 compared with 10,189 units a year ago but sales was slower, with 4,373 units sold in 1H2015 compared with 4,989 units sold a year ago.

In addition, most of the sales were achieved between January and March, before the implementation of the Goods and Services Tax on April 1.

The number of respondents who reported unsold units was higher at 78% in 1H2015 compared with 57% a year ago, with end-financing issues and loan rejection being one of the top reasons for unsold units.

Fateh Iskandar said issues with end-financing are on the rise, affecting sales with property priced from RM250,001 to RM500,000 and from RM700,000 to RM1 million facing the highest loan rejections.

"Developers are pessimistic on the outlook of the property industry in 2H2015 but anticipate the level of pessimism to be reduced in the following six months," he added. - By The Sun

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