REHDA president Datuk Ho Hon Sang. — RAJA FAISAL HISHAN/The Star
PETALING JAYA: Property developers are more optimistic about the sector’s outlook for the first half (1H) of 2025 compared with 2H2024, driven by carry-forward transactions from the previous year and rising building material costs.
Real Estate and Housing Developers' Association Malaysia (Rehda) president, Datuk Ir Ho Hon Sang, noted that this year’s market sentiment has been somewhat dampened, with developers adopting a cautious, wait-and-see approach to assess what lies ahead for the industry in 2025.
"Developers are still treading carefully with their business operations, despite improving industry conditions in terms of launches and sales. They want to know what incentives or impetus from the upcoming Budget 2025 (to be tabled on Oct 18) will drive the property market," he said.
Ho also highlighted the government’s push for more affordable housing, adding that Rehda had proposed the formation of a task force comprising government authorities and Rehda to assess the actual demand for affordable housing.
"This is to study and analyse the actual demand for affordable housing based on informed data and statistics, considering targeted buyers, locality, number of units and timing," he told reporters after a media briefing on the Property Industry Survey for 1H2024 and the Market Outlook for 2H2024 and 1H2025 today.
During his presentation, Ho revealed that 162 Rehda members in Peninsular Malaysia who participated in the survey reported increased business costs in 1H2024 compared to 2H2023.
A significant 69 per cent of developers faced construction challenges due to high material prices, shortages, inconsistent supply of building materials, rising wages and a lack of skilled workers.
Materials such as sand, glass and concrete experienced an annual price increase of 13 to 15 per cent as of June 31, 2024.
"To address the issue, developers had no choice but to lower their profit margins, increase property selling prices, and use more cost-effective materials in a prudent and careful manner," he said.
In 1H2024, 84 per cent of respondents reported being affected by economic conditions, prompting them to implement cost-cutting measures, including freezing recruitment, reducing employee benefits and delaying or scaling down project launches.
Nevertheless, Ho said 44 per cent of respondents planned to launch projects in 2H2024, focusing primarily on landed properties, which continue to see higher demand than high-rise developments.
To boost sales, he said developers will offer assistance with down payments (covering the first 10 per cent), increase their use of digital marketing and virtual technologies, and provide discounts to buyers, averaging eight per cent.
The survey reported that 11,814 units were launched in 1H2024, an increase of seven per cent from the 11,032 units launched in 2H2023. Sales also showed modest growth, with 13,445 units sold (2H2023: 12,017 units), of which 65 per cent (8,699 units) were from previously unsold stock, with the remainder from new launches in 1H2024.
The survey also found that the most sought-after property types were serviced residences and two- to three-storey terrace homes.
"In terms of price range, 46 per cent of respondents reported that their unsold completed units were priced at RM500,000 or below.
"The top reasons for this situation, according to respondents, were end-financing loan rejections, low demand and interest, and Bumiputera lots. Additionally, 33 per cent of unsold completed Bumiputera lots have been on the market for over 36 months, which I believe is an issue the industry needs to address," Ho added. - Bernama
