Property Developers More Optimistic on 1H2025 Than 2H2024!

Real estate developers in Malaysia are more positive about the country's property industry outlook for the first half of 2025 (1H2025) compared to the second half of 2024 (2H2024), according to Real Estate and Housing Developers’ Association (Rehda) Malaysia. 

 Rehda survey’s report revealed that around 26% of the 162 property developers in Peninsular Malaysia who participated in the survey were optimistic of the residential sector's growth for 1H2025, with 53% neutral, 17% pessimistic, 3% very pessimistic and 1% very optimistic. This was compared to 22% of the survey respondents who were optimistic of the industry's outlook for 2H2024, with none who were very optimistic. 

 

Source:https://en.wikipedia.org

 56% of the developers surveyed are not looking to launch new projects in 2H2024, with about three-quarters of them anticipating their sales performance to be 50% or below in the first six months after the launch.  Unfavourable market conditions, business constraints, lack of suitable product or land bank locations, higher number of unsold stock and lack of demand in a project location are the reasons, according to the survey report.

In addition, a significant 93% of the developers surveyed said there is a higher increase in the price of building materials in 2024 compared to the previous years, with materials such as glass, cement and sand having recorded more than 10% increase in average price as at June 30, 2024. 

To address this issue, developers could lower profit margins, increase property selling prices, use more cost-effective materials, change the design of houses and build smaller units.  

The government could exempt the 1% levy imposed by the Human Resource Development Corporation (HRD Corp) on companies in the construction industry, as well as provide incentives such as tax deductions for developers who undertake green and sustainable projects. Perhaps Budget 2025 will address some of these issues? 

Reference:

Property developers more optimistic on 1H2025 than 2H2024 – Rehda Survey, TheEdge,
13 September 2024