Resilient property market expected
PETALING JAYA: The Real Estate and Housing Developers’ Association Malaysia (Rehda) expects the housing and property market to plateau in the second half of 2012, but will remain resilient.
According to a survey Rehda conducted, property developers are optimistic of the second half and more respondents plan to launch projects.
The survey is based on a sample size of 180 companies, out of the 1,003 Rehda members.
Property developers are less optimistic of the first half of 2013 due to certain factors, including the outcomes of the 13th general elections and Budget 2013. The current global economic situation also contributes some uncertainty.
The results of the survey show that the property market in the first half of this year is still driven by the domestic market, despite beliefs that foreigners are buying more local properties. Last year, only 2% of total properties transacted were from foreigners.
Rehda president Datuk Seri Michael Yam said the Government should review building less low-cost homes. In 2011, 1.04 million units out if the total 4.51 million total residential stock were low-cost homes.
“As Malaysia moves towards striving to reach developed nation status by 2020, the Government should review if there is a need for so many low-cost homes,” Yam said.
Rehda national treasurer N.K. Tong said: “Perhaps the Government should consider implementing a limitation to low-cost homes like what Singapore has done with the HDB (Housing and Development Board) flats.”
HDB flat owners-to-be are not allowed to own any other properties in Singapore, or in any other part of the world. Tong said if such a plan was implemented in Malaysia, there would be less abuse of these properties, unfairness caused to developers and – to a larger extent – the people.
“I’m more concerned with the supply factor. It is moving downwards due to the shortage of prime land and rising building costs. Come 2015, if the Government is serious about implementing the build-and-sell plan, the supply (of houses) will reduce by about 80%,” Rehda past president Datuk Ng Seing Liong said.
His main concern if the plan was implemented was that property prices would continue to trend upwards due to the supply and demand equilibrium.
“In terms of the property sector, we must look at a long-term scenario,” he said in regards to future plan implementations.
Rehda public relations, communications and publication committee member Che King Tow said the Government usually owned the best-located properties.
He said it would benefit the public if the Government could consider releasing its land in high-density areas such as Jalan Duta and Selangor Golf Course in the upcoming budget.
“Those are suitable prime land for mass housing. They can cut down on ownership of cars, and use public transport instead,” he said.
Yam also urged the Government to establish an automatic-release mechanism to enable the release of unsold bumiputera units. Although Rehda has not complained about allocating a portion for bumiputera buyers, the unsold properties are affecting the developers.
“More projects are having unreleased unsold bumiputera lots which impact the developer’s cash flow. An auto-release mechanism should be put in place to automatically release the unsold properties after a stipulated time to prevent this,” he said.
Source: The Star
@heehee
2015 got build-and-sell policy… you will have to pay much more or wait for another three years for new project by then… supply will drop 80% he said…
@In laws
The fact is the current DIBS package already factor-in the upfront cost and increase the price like the build-and-sell concept. Both also buyers only pay 10% downpayment and only start installment after completion. Like Hokkien said: LPPL.
The only different is with build-and-sell, buyers has no liability to pay bank loan if project been abandoned halfway (developers loan from bank during construction, not buyers). for DIBS, buyers still need to pay back bank loan if project abandoned.
@heehee
But DIBS only interest bearing.. not other construction cost…banks won’t release progressive payment like current DIBS projects …
Don’t think DIBS price = build-then-sell price la.
@In laws
DIBS – buyers loan from bank & developer bear the interest during construction (some how the interest already factor into upfront selling price – where got free lunch!)
build-then-sell – developer loan from bank to develop the project & bear the interest during construction. After complete, buyers loan from bank and paying lump sum to developer like subsale. Developer clear their loan with the money.
The difference is who get the loan from bank during construction, and the liability of loan if project abandoned.
by the way, some developers mentioned that they sell so expensive for DIBS project because you are paying for the “future price”… more like subsale to you after complete (because they pay the interest during construction & you pay nothing except downpayment).
Sierra Residence without DIBS can sell much cheaper than other (<300psf ~1 year ago).. so you can see how the DIBS has jacked up the price!
@heehee
This is only true if the DIBS project is really selling at 3 years later price, not just add the 20-30k interest on top of their original price. The interest rate for BTS is the same or lower.
But with BTS, only big developers can play… you know how much they normally sell la, and projected 80% drop in supply some more.
@In laws
It is 10:90 Build-then-sell model, it means that price already locked down upfront and buyers pay 10% downpayment & remaining 90% after completion. The price is fixed since the beginning, same as DIBS.
http://biz.thestar.com.my/news/story.asp?sec=business&file=/2011/3/12/business/8222477
With BTS, it is not only big developers can play, but GOOD developers can play. Bank will scrutinize the project and developers track record then only provide loan. If the project is good and developer manage cash flow well (even though small player) no reason bank reject to loan.
@heehee
10:90 BTS model is still a wish from the consumer association since many months ago. And big and good developers are only a few nowadays, and they are selling 20-40% higher price than those no name developers because of their brand. Don’t think bank will easily loan to those developers that do not have enough assets when the new BTS scheme enforced. Supply sure shrinks drastically.
Guess your speculation that the property price will drop by 2015 is more difficult than climbing mount Everest la.
Maybe can consider the “affordable home” or “my first home program”. Most likely will be HDB.
@In laws
hee hee hee… then those “no name” developers now have to work harder lor. They now still have 5 years (there is 2 years buffer after 2015) to prove themselves and build up reputation. The jungle rule applied – the fittest survive. Nowaday anyone simply can be developer and some very inexperience until >1 year also cannot sign SnP.
Short of supply? hee hee hee, isn’t it good news for investors so that people will have to buy the excess subsale rather than keep chasing after new launch projects from developers… now you see the subsale market very good for investors meh?
@heehee
Projects completed recently or within last two years one all earn at least 100k without any touch. Excess subsales are due to bad location, size too small or too big, bad layout, lousy finishing. That one nobody can help since it is not a good product… hee hee hee…
Good product at good location sure got demand one… hee hee hee…
@In laws
hee hee hee, then why developers need to worry about BTS? good product & good location sure bank will provide loan to support lah…if really lousy developers then nobody can help… hee hee hee
@heehee
Hee hee hee… no name developers sure worry about BTS? Bank only provides loan after seeing their balance sheet… hee hee hee