According to the Real Estate and Housing Developers’ Association Malaysia (REHDA)’s Property Industry Survey for this year’s first half, 94 per cent said cost has gone up, with 45 out of 125 respondents saying cost rose by more than 5 per cent after its implementation.
Similarly, 71 per cent of those surveyed said GST has increased the price of property, with 22 of them saying price has increased by more than 5 per cent.
Despite that, two-thirds of respondents also said that they have absorbed the hike instead of passing it to house buyers, with 13 per cent saying they bore 100 per cent of the increase rising from GST.
“Everybody says that developers are more interested in making money, profit-oriented. First of all, yes we have to make some profit, but our profit has actually decreased,” said REHDA president Datuk Seri Fateh Iskandar Mohamed Mansor.
“It’s not that easy. People keep pushing the blame, we are seen as black sheep for everything that is happening in the country.”
The respondents said that cost has risen by up to 11 per cent from the previous half, while 81 per cent said the rise of business cost has severely affected their businesses.
Datuk Seri Fateh said the weakening of ringgit has especially increased price of imported material such as steel, and other essential components such as elevators, escalators and air-conditioning.
This comes sales performance dropped from the same period last year to just 40 per cent of units launched being sold.
For the period under review, 10,877 units were launched, of which 10,550 were residential units, and only 4,373 or 40%, were sold. The best-selling property type were the double and triple-storey units while sales of apartments and condominiums were dismal, with only 779 of the 4,259 units launched, sold.
“The take-up rate was not even 50% for the apartments and condominiums, while landed property were most popular with double and triple-storey units making up more than half of the total units sold.”
Almost all property developers in Peninsular Malaysia said the implementation of the Goods and Services Tax (GST) has caused their business cost to increase, according to the results of a recent survey released today.
According to the Real Estate and Housing Developers’ Association Malaysia (REHDA)’s Property Industry Survey for this year’s first half, 94 per cent said cost has gone up, with 45 out of 125 respondents saying cost rose by more than 5 per cent after its implementation.
Similarly, 71 per cent of those surveyed said GST has increased the price of property, with 22 of them saying price has increased by more than 5 per cent.
Despite that, two-thirds of respondents also said that they have absorbed the hike instead of passing it to house buyers, with 13 per cent saying they bore 100 per cent of the increase rising from GST.
“Everybody says that developers are more interested in making money, profit-oriented. First of all, yes we have to make some profit, but our profit has actually decreased,” said REHDA president Datuk Seri Fateh Iskandar Mohamed Mansor.
“It’s not that easy. People keep pushing the blame, we are seen as black sheep for everything that is happening in the country.”
The respondents said that cost has risen by up to 11 per cent from the previous half, while 81 per cent said the rise of business cost has severely affected their businesses.
Datuk Seri Fateh said the weakening of ringgit has especially increased price of imported material such as steel, and other essential components such as elevators, escalators and air-conditioning.
This comes sales performance dropped from the same period last year to just 40 per cent of units launched being sold.
For the period under review, 10,877 units were launched, of which 10,550 were residential units, and only 4,373 or 40%, were sold. The best-selling property type were the double and triple-storey units while sales of apartments and condominiums were dismal, with only 779 of the 4,259 units launched, sold.
“The take-up rate was not even 50% for the apartments and condominiums, while landed property were most popular with double and triple-storey units making up more than half of the total units sold.”
Despite that, more than 9,000 more units of houses are expected to be launched nationwide in the second half of this year.
Meanwhile, REHDA has found that only 31 per cent of developers responding to its survey expect more than 50 per cent sales within six months of new launches.
Presenting the property industry survey in the first half of 2015, Datuk Seri Fateh said 58 per cent of the respondents anticipated sales of between 26 and 50 per cent, while the remaining 11 per cent expected sales to be below 25 per cent.
“Sales performance have been on a subdued mode for the past one-and-a-half years,” he told a media briefing on the survey.
“The survey respondents were pessimistic on the outlook of the property market in the second half of the year, but the level of pessimism is expected to reduce in the following six months,” he added.
Datuk Seri Fateh said the survey showed that strata units dominated the launches as opposed to landed units, mostly in Penang, Selangor and Kuala Lumpur in the first half of this year.
He said half of the units launched were priced below RM500,000, while new launches of houses priced below RM200,000 were on the rise.
“Property priced below RM200,000 has actually gone up, from just 5 per cent of all new launches to 14 per cent,” he said. Contrastingly, property in the RM500,001 to RM1 million bracket also jumped from 34 per cent to 42 per cent.
In their response, the developers said that building affordable housing units was a daunting task as high cost of land acquisition made it economically unfeasible.
They also complained that unsold units increased to 78 per cent in the first half of 2015 from 64 per cent in the second half of 2014 and 57 per cent in the first half ended of 2014.
The number of unsold property units in Malaysia have increased due to unreleased Bumiputera lots and loan rejections, says REHDA. The unsold units were mostly in Kedah, Penang, Selangor and Johor, and mainly in the RM500,000 to RM1 million price range.
“Unreleased Bumiputera lots and loan rejections by banks are the top reasons for the unsold units,” said Datuk Seri Fateh.
More prospective buyers failed to secure end-financing, with the percentage increasing from an average 29 per cent in second half of 2014 to 35 per cent in the first half of 2015.
These were mostly due to ineligibility of income, lower margin of financing offered by banks and buyers’ credit history. Many banks, he added, were only offering between 75% to 80% loans, which made it difficult for buyers.
Most of the loans rejected, he said, were those involving residential property priced between RM250,001 and RM500,000 and between RM700,001 to RM1 million.
Interestingly in Kuala Lumpur and Selangor, most of the launches happening in the next half will be priced between RM1 million and RM2 million, up from between RM500,000 and RM1 million in the current half.
“Prices of new units in the Klang Valley have remained in the same range for the past five halfs, and has not been rising fast as perceived,” he said.
Another outlier is Kelantan, where more projects slated for the next half will be between RM200,000 and RM500,000, up from below RM200,000 previously, due to greater acceptance of condominium units in its capital Kota Bharu.
New projects in Johor and Penang jumped from being mostly between RM200,001 and RM500,000 to the RM500,001 to RM1 million range. In Selangor, Johor, Penang and Negri Sembilan, average units prices will remain between the RM500,001 and RM1 million, according to the survey. Prices in Pahang, Perak, Malacca and Kedah are expected to stay in the RM200,001 to RM500,000 range.
REHDA’s survey was conducted between January and June this year between 125 developers in Peninsular Malaysia, down from 132 previously.
Malaysia’s GST rate of 6 per cent was rolled out on April 1 this year. Residential properties are exempted from GST, which means property developers cannot impose GST on houses that they put up for sale.
Having said that, property developers still have to bear with GST on the inputs, such as bricks, rebar, cement, and etc – in building the houses. As houses are GST exempt, the developer cannot claim the input tax as tax credits.
Despite that, more than 9,000 more units of houses are expected to be launched nationwide in the second half of this year.
Meanwhile, REHDA has found that only 31 per cent of developers responding to its survey expect more than 50 per cent sales within six months of new launches.
Presenting the property industry survey in the first half of 2015, Datuk Seri Fateh said 58 per cent of the respondents anticipated sales of between 26 and 50 per cent, while the remaining 11 per cent expected sales to be below 25 per cent.
“Sales performance have been on a subdued mode for the past one-and-a-half years,” he told a media briefing on the survey.
“The survey respondents were pessimistic on the outlook of the property market in the second half of the year, but the level of pessimism is expected to reduce in the following six months,” he added.
Datuk Seri Fateh said the survey showed that strata units dominated the launches as opposed to landed units, mostly in Penang, Selangor and Kuala Lumpur in the first half of this year.
He said half of the units launched were priced below RM500,000, while new launches of houses priced below RM200,000 were on the rise.
“Property priced below RM200,000 has actually gone up, from just 5 per cent of all new launches to 14 per cent,” he said. Contrastingly, property in the RM500,001 to RM1 million bracket also jumped from 34 per cent to 42 per cent.
In their response, the developers said that building affordable housing units was a daunting task as high cost of land acquisition made it economically unfeasible.
They also complained that unsold units increased to 78 per cent in the first half of 2015 from 64 per cent in the second half of 2014 and 57 per cent in the first half ended of 2014.
The number of unsold property units in Malaysia have increased due to unreleased Bumiputera lots and loan rejections, says REHDA. The unsold units were mostly in Kedah, Penang, Selangor and Johor, and mainly in the RM500,000 to RM1 million price range.
“Unreleased Bumiputera lots and loan rejections by banks are the top reasons for the unsold units,” said Datuk Seri Fateh.
More prospective buyers failed to secure end-financing, with the percentage increasing from an average 29 per cent in second half of 2014 to 35 per cent in the first half of 2015.
These were mostly due to ineligibility of income, lower margin of financing offered by banks and buyers’ credit history. Many banks, he added, were only offering between 75% to 80% loans, which made it difficult for buyers.
Most of the loans rejected, he said, were those involving residential property priced between RM250,001 and RM500,000 and between RM700,001 to RM1 million.
Interestingly in Kuala Lumpur and Selangor, most of the launches happening in the next half will be priced between RM1 million and RM2 million, up from between RM500,000 and RM1 million in the current half.
“Prices of new units in the Klang Valley have remained in the same range for the past five halfs, and has not been rising fast as perceived,” he said.
Another outlier is Kelantan, where more projects slated for the next half will be between RM200,000 and RM500,000, up from below RM200,000 previously, due to greater acceptance of condominium units in its capital Kota Bharu.
New projects in Johor and Penang jumped from being mostly between RM200,001 and RM500,000 to the RM500,001 to RM1 million range. In Selangor, Johor, Penang and Negri Sembilan, average units prices will remain between the RM500,001 and RM1 million, according to the survey. Prices in Pahang, Perak, Malacca and Kedah are expected to stay in the RM200,001 to RM500,000 range.
REHDA’s survey was conducted between January and June this year between 125 developers in Peninsular Malaysia, down from 132 previously.
Malaysia’s GST rate of 6 per cent was rolled out on April 1 this year. Residential properties are exempted from GST, which means property developers cannot impose GST on houses that they put up for sale.
Having said that, property developers still have to bear with GST on the inputs, such as bricks, rebar, cement, and etc – in building the houses. As houses are GST exempt, the developer cannot claim the input tax as tax credits.
News sources: REHDA, The Star, The Malaysian Insider and The Malay Mail Online.