PETALING JAYA: Developers are generally neutral to pessimistic on the prospects of the local property market, given the increasing costs and the rising number of unsold properties.
In the first half of this year, property sales fell 9% compared with the same period last year, according to the Real Estate and Housing Developers Association's (Rehda) latest Property Industry Survey.
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.
Rehda president Datuk Seri Fateh Iskandar Mohamed Mansor said at a press conference: '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.'
The Rehda Property Industry Survey 1H 2015 also revealed that the number of unsold units rose to 78% in the first half of this year from 64% in the first half of 2014 '“ a 14% increase.
The unsold units were mostly in Kedah, Penang, Selangor and Johor, and mainly in the RM500,000 to RM1mil price range.
'Unreleased bumiputra lots and loan rejections by banks were the top reasons for the unsold units,' Fateh Iskandar pointed out.
Loan rejections increased to 35% from 29% in the previous half, with most involving residential property priced between RM250,001 and RM500,000, followed by those between RM700,000 and RM1mil.
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.
To make things worse, Fateh Iskandar said costs for developers were increasing, with 71% of the respondents saying costs had gone up by up to 11%, due factors including the goods and services tax (GST).
'Almost all repondents indicated that GST had increased the overall cost of doing business. Most said the tax had pushed up costs by up to 5%, and this in turn has pushed up house prices.
'Due to the weakening ringgit, certain materials which are still imported like lifts, escalators and some air conditioners are becoming more expensive,' he added.
However, he said, it was too early to tell how much the weakening ringgit had impacted developers.
Two thirds of the developers said GST had caused property prices to rise, and 22 of them said prices went up by over 5%.
The other 67% said they had absorbed the increase, at least partially.
'Most respondents are neutral to pessimistic on the outlook for the next half of the year.
'However, we anticipate that the level of pessimism will reduce in the following six months as developers get accustomed to the impact of the GST,' he said.
The survey also found that an increased number of new property priced below RM200,000 were launched in the first half, and less property in the RM200,001 and RM500,000 bracket.
Half of all the property launched were priced below RM500,000.
'Property priced below RM200,000 has actually gone up, from just 5% of all new launches, to 14%,' he said.
Property in the RM500,001 to RM1mil bracket also jumped from 34% to 42%.
'The biggest chunk of property price is still between RM200,001 and RM500,000, although the number of units dropped,' he said.
In Kedah, Pahang, Negri Sembilan and Perak, most of the property launched were in the RM200,001 to RM500,000 range, while in the Federal Territory, Selangor and Malacca, prices were between RM500,001 and RM1mil.
In Kelantan, where there was a surge in condominium units, prices moved from below RM200,00 in the previous half to between RM200,001 and RM500,000.
New projects in Johor and Penang jumped from being mostly between RM200,001 and RM500,000 to the RM500,001 to RM1mil range.
'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.
According to the survey, prices of residential property in the Federal Territory will surge between RM1mil and RM2mil during the second half this year from between RM500,000 and RM1mil during the first half.
In Selangor, Johor, Penang and Negri Sembilan, average units prices will remain between the RM500,001 and RM1mil, according to the survey.
Prices in Pahang, Perak, Malacca and Kedah are expected to stay in the RM200,001 to RM500,000 range, while prices in Kelantan are set to jump from below RM200,000 to between RM200,001 and RM500,000.