PROPERTY INDUSTRY SURVEY - Building and Construction … · PROPERTY INDUSTRY SURVEY 2H 2013 42 #Increase in foreign ownership threshold from RM500,000 to RM1,000,000 50% of the respondents

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The Outlook of Real Estate in Malaysia

Base on

PROPERTY INDUSTRY SURVEY

2H 2013

PRESENTATION BY:

James Chua

Executive Director

GreenRE OF REHDA

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PROPERTY INDUSTRY SURVEY 2H 2013

Prepared By:

• Survey findings as at February

2014

• Survey forms sent out to

REHDA members, comprising

housing and property

development companies

• 150 (14.3%) companies

responded out of 1,046

members.

• Respondents are from all 12

states in Peninsular Malaysia

(including Federal Territory of

Kuala Lumpur)

INTRODUCTION State Developers %

Selangor 34 23

Johor 17 11

Pahang 17 11

Kuala Lumpur 13 9

Perak 14 9

Kedah/Perlis 14 9

Melaka 11 8

Penang 9 6

Negeri Sembilan 9 6

Kelantan 9 6

Terengganu 3 2

Total

150

100%

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FINDINGS

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OUTLINE

5

LAUNCHES

PROPERTY TYPE

PROPERTY PRICE

BUYERS PROFILE

BUSINESS OPERATION

OUTLOOK

GREATER KL

CONCLUDING REMARKS

6

LAUNCHES PROPERTY INDUSTRY SURVEY 2H 2013

Project Launches Trend

About half of respondents with project launches in 2H 2013.

Similar trend observed in corresponding period over the last 3 years.

Units Launched

7

52%

45%

46%

48%

52%

45%

*147 *148 *180 *170 *150

Number of Units Launched (*) Total Number of Respondents % of Respondents with Project Launches

*150

Number of projects launches in 2H 2013 reduced by 32%

compared to 1H 2013.

Quarterly Launches in 2013

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*58 *43 *41

% Number of project launches (*) Number of project launches

Property Type

1H 2013 2H 2013

Units Launched Units Sold (%) Units Launched Units Sold (%)

Low Cost House/Flat 241 75 (31%) 0 0 (0%)

Single Storey Terrace 692 422 (61%) 743 536 (72%)

2-3 Storey Terrace 3,104 1,939 (62%) 2,588 1,468 (57%)

Semi-Detached 869 451 (52%) 858 455 (53%)

Bungalow 185 77 (42%) 106 51 (48%)

Serviced Apartment 2,028 1,268 (63%) 2,082 1,043 (50%)

Apartment/Condominium 1,863 738 (40%) 1,799 862 (48%)

Shop Office/Block Office 681 310 (46%) 423 222 (53%)

SoHo/ SoFo/ SoVo 19 0 (0%) 319 94 (30%)

Others 1,303 815 ( 63%) 446 252 (57%)

TOTAL (%) 10,985 6,095 9,364 4,983

Number of units sold reduced by 20% in 2H 2013 compared to 1H

2013.

Sales Performance: Over a Period of 6 Months

9

52%

45% 46%

48%

52%

45% 48%

*150

Future Launches: Residential & Commercial

Reduced number of respondents with project launches. Increased number of total units to be launched in 1H 2014.

No. of Units % respondents with future launches

10

*150

(*) Total Number of All Respondents

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PROPERTY TYPE PROPERTY INDUSTRY SURVEY 2H 2013

No. of units launch

Types of Property

Significant increase in residential launches in 1H 2014.

Slight decrease in commercial units in 1H 2014.

(87%)

(13%)

(93%)

(7%)

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14,005

Launches Performance: Residential Units - Nationwide

Launches of strata & landed property stable.

Apparent increase in strata vs landed attributable in more respondents

from Selangor and Iskandar. 13

2H 2013 1H 2014

• 2-3 Storey Terrace (2,558) 1

• Serviced Apartment (2,082) 2

• Apartment / Condominium (1,799)

3

• Apartment / Condominium (4,985) 1

• Serviced Apartment (3,523) 2

• Single Storey Terrace (2,047) 3

*Selangor (953), KL (414), Johor (306)

*Johor (916), Selangor (479), Penang (416)

*Johor (1,125), Selangor (793), Pahang (281)

Residential Units by Type Top 3

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*Johor (1,944), Selangor (947), Perak (897)

*Selangor (2,325), Johor (1,198)

*Johor (573), Melaka (430), KL (266)

*Number of residential units

Commercial Unit Type

2H 2013

1H 2014

446

423

319

378

356

346

Number of units

Number of units

Slight reduction in number of launches in 1H 2014 with SoHo/SoFo/SoVo leading the launches.

15

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PROPERTY PRICE PROPERTY INDUSTRY SURVEY 2H 2013

Residential Selling Price- Nationwide

% respondents with range of residential property selling price

2H 2013 1H 2014

17

Property prices in the range of RM200,001 –

RM500,000 still dominates the market.

Percentage of launches below RM1 million for

2H 2013 = 87% and 1H 2014 = 76%.

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Residential Selling Price- Nationwide

Number of respondents selling residential property

within RM250,000 – RM500,000 expected to remain in

1H 2014.

STATE MOST LAUNCHED PRICE

RANGE IN 2H 2013 STATE

MOST EXPECTED PLANNED

PRICE RANGE 1H 2014

Nationwide

*(46) RM200,001 – RM500,000

Nationwide

*(52) RM200,001 – RM500,000

Selangor (6) RM200,001 – RM500,000 Selangor (6) RM500,001– RM1mil

WPKL (2) RM500,001 – RM1mil

WPKL (2) RM500,001– RM1mil

Johor (8) RM200,001 – RM500,000 Johor (11) RM200,001 – RM500,000

Penang (4) RM200,001 – RM500,000 Penang (4) RM200,001 – RM500,000

Perak (4) RM500,001– RM1mil Perak (10) RM200,001 – RM500,000

*Note: Numbers in bracket indicate total number of respondents

Residential Selling Price by State

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STATE

MOST LAUNCHED

PRICE RANGE IN 2H

2013

STATE MOST EXPECTED PLANNED

PRICE RANGE 1H 2014

Kedah (3) RM200,001 – RM500,000 Kedah (6) RM200,001 – RM500,000

Melaka (4) RM200,001 – RM500,000 Melaka (4) RM200,001 – RM500,000

Negeri

Sembilan (3) RM200,001 – RM500,000

Negeri Sembilan

(1) RM200,001 – RM500,000

Pahang (10) RM200,001 – RM500,000 Pahang (7) RM200,001 – RM500,000

Terengganu (0) NIL Terengganu (0) NIL

Kelantan(2) Below RM250,000 Kelantan (1) Below RM250,000


Residential Selling Price by State (cont’)

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Residential Selling Price (RM200,001 – RM500,000) by Location

STATE LOCATION

Johor Kulai, Johor Bahru, Kluang, Endau, Desa Tebrau &

Pulai

Penang Bertam, Butterworth, Balik Pulau & Raja Uda

Pahang Sungai Karang, Bukit Setongkol, Sungai Soi,

Kuantan & Maran

Perak Ipoh, Seri Iskandar & Pengkalan

Commercial Selling Price- Nationwide

Respondents selling commercial property – Shop Office/Block Office & SoHo/SoFo

2H 2013

1H 2014

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13 respondents with commercial property

launches.

Majority are selling in the range of

RM500,001 – RM1,000,000.

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BUYERS PROFILE PROPERTY INDUSTRY SURVEY 2H 2013

Buyers Intent: Main purpose of purchase

Self-dwelling

Capital appreciation

Local buyers

*Average percentage of buyers as stated by respondents

78%

Buy for family members

12%

6%

4%

44%

26%

22%

8%

% respondents

Local buyers leading

the market.

Mainly purchasing

for self-dwelling. 24

Foreign purchase

Rental income

Investment

Self-dwelling

Holiday homes

Others

25

BUSINESS OPERATIONS

1. Unsold Units 2. Construction 3. Financing Issues

http://www.google.com.my/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=wX_bhbqYmjs7WM&tbnid=ytOXpgPri8DUXM:&ved=0CAUQjRw&url=http://www.ctfcareers.org/&ei=wnPnUYfNHobnrAeAu4HQDA&psig=AFQjCNFIlBx3KyjRNFLGF3U92X7Z93zS5Q&ust=1374209331400561

55% of respondents

experienced higher cost of doing business in

2H 2013.

Overall Cost of Doing Business

% respondents 26

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UNSOLD UNITS


BUSINESS OPERATION

59% (89 out of total respondents) have unsold units up to 2H 2013.

36% of respondents with unsold units are severely impacted.

Properties remaining unsold after projects completion Unsold Units:

Percentage of Unsold Units

No. of respondents with unsold units

Impact of Unsold Units

on Company’s Cash Flow

Severe impact (-ve)

21%

No impact (+ve)

36%

43%

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( % of unsold units)

Less impact

Top 3 Reasons for Unsold Units

29

Unreleased Bumiputra lots is the main reason for unsold

units.

• Unreleased Bumiputra Lots 1 • Low Demand 2 • Odd/Special Units 3

Price Range of Unsold Units

30

% of Respondents of Unsold Units by Price Range

31

CONSTRUCTION


BUSINESS OPERATION

Construction Challenges

*(55)

38% of respondents cited that labor and building material issues

severely affected their projects. 32

*(95)


Main Challenges Labor Issues: 1- Wages

2- Shortage of supply

3- Inconsistent supply

Building Material Issues: 1- The ever increasing price for

cement, steel bars,

sand, river sand and bricks

2- Shortage of supply

3- Inconsistency of supply

No Impact (+ve)

3%

Less Impact (59%)

38%

Impact of construction

problems on projects

Severe Impact (-ve)

33

FINANCING ISSUES


BUSINESS OPERATION

Financing Issues

% Respondents with types of financing issues % Respondents with financing issues

34

Number of respondents with financing issues remains, problem mainly on end-

financing.

• End-financing 81%

• Others 10%

• Bridging loans 9%

60% End- Financing

Issues

Main Financing Issues

Bridging Finance

End-Financing

Others

Bank capping loan unreasonably

Higher sales required before drawdown

Bank requesting

more documents

Others

Bank request unnecessary documents

Lower margin of finance

7% Bridging Finance

Issues

Stricter

requirement

% respondents 35

Ineligibility of buyers’ income

36

OUTLOOK GENERAL BUSINESS AND INDUSTRY TREND

Measures introduced to Curb

Property Price Increase

• Max 70% LTV for 3rd property - 3 November 2010

• Margin of financing based on net income - 18

November 2011

• Removal of DIBS – 25 October 2013

• Min price of Rm1m for Foreign Purchaser - 25

October 2013

• Levy on purchase made by foreign buyers:

i) Penang – 2% of purchase price, effective 1 March

2014;

ii) Johor – 3 % of purchase price, effective 1 May

2014;

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Measures introduced to Curb

Property Price Increase

Impact of the Cooling Measures (Budget 2014) on Real Estate Industry


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#Requirement for developers to disclose all details pertaining to sales pricing

47% of respondents

cited that the

requirement for

developers to disclose

all details pertaining to

sales pricing will have

negative impact on the

real estate industry.

And 43% are neutral.



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#Abolition of Developers Interest Bearing Scheme (DIBS)

48% of

respondents cited

that the abolition of

DIBS will give

negative impact on

the real estate

industry.

And 39% are

neutral.



41

#Implementation of Good and Services Tax (GST) in April 2015

74% of respondents

believed that the

implementation of

GST will have

negative impact on

the real estate

industry.

And 13% are

neutral.



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#Increase in foreign ownership threshold from RM500,000 to RM1,000,000

50% of the

respondents viewed

that the increase in

foreign ownership

threshold from

RM500,000 to

RM1,000,000 will

negatively impact

the real estate

industry.

And 32% are

neutral.

Overall Outlook on the Real Estate Industry


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#Overall outlook for 1H 2014

87% of

respondents are

pessimistic or neutral

on the outlook of the

real estate industry

for 1H 2014.

Overall Outlook on the Real Estate Industry


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#Overall outlook for 2H 2014

More respondents

either neutral or

pessimistic on the

outlook of the real

estate industry for 2H

2014.

SPECIAL FEATURE

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GREATER KUALA LUMPUR

*The respondents for this survey consist of only Selangor and Kuala Lumpur states (46 respondents)

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• Petaling Jaya-Damansara

1 • Puchong 2 • KLCC 3 • Ampang 4 • Subang Jaya 5

Top 3 Property Types

Top 5 Hot spots* PROPERTY INDUSTRY SURVEY 2H 2013

*(based on 21 areas in Klang Valley)

1. Landed Properties

2. Serviced Apartment

3. Condominium

47

• Location 1

• Price 2

• Potential rental yield

3

Factors influencing buyers'

preference PROPERTY INDUSTRY SURVEY 2H 2013

Top 3 factors cited by respondents

Desirables %

Properties with tighter security system 32%

Affordable homes 28%

SoHo/SoFo/SoVo 14%

Strata luxury homes 12%

Lakeside/waterfront development project 6%

Strata property unit with ‘garden in the sky’ 6%

Others 1%

48


Future Unique Selling Points Trends

% KL and Selangor respondents

49


• Number of respondents with launches and total units

launched have gone down compared to the previous

corresponding period.

• Overall cost of doing business has further

increased in 2H 2013.

• Unreleased Bumiputra lots remains the number one

reason for unsold units.

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• Financing issues are mostly on buyers’ difficulty to

obtain end-financing caused by stricter requirement

by the financial institutions.

• High wages and shortage of supply are the biggest

labor issues in construction.

• Major problems with building materials are the

continuous price increase and shortage of supply

especially cement, steel bars and bricks.

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• Majority of respondents cited the implementation

of GST in April 2015 as the major challenge that

will impact the real estate industry negatively.

• Generally, developers are pessimistic or neutral on the

outlook of the real estate industry in 1H 2014 and

2H 2014.

• Possible “wait and see” attitude to assess global

situation and the impact of Budget 2014 Cooling

Measures.

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THANK YOU

Responsive | Respected | Responsible | Relevant

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PROPERTY INDUSTRY SURVEY - Building and Construction … · PROPERTY INDUSTRY SURVEY 2H 2013 42 #Increase in foreign ownership threshold from RM500,000 to RM1,000,000 50% of the respondents

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