Resilient property market expected

Developers optimistic of H2 but not sure about 2013

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. - The Star