Thu Sep 12 06:16:00 UTC 2024: ## Property Developers Optimistic About 1H 2025 Despite 2024 Challenges
**PETALING JAYA** – Property developers in Malaysia are cautiously optimistic about the sector’s outlook for the first half of 2025, driven by carry-over transactions from the previous year and rising building material costs, according to the Real Estate and Housing Developers’ Association Malaysia (Rehda).
Rehda President Datuk Ir Ho Hon Sang noted that while the market sentiment has been dampened in 2024, developers are taking a wait-and-see approach to assess the industry’s trajectory in 2025. They are particularly keen to see what incentives or impetus will be outlined in the upcoming Budget 2025, to be tabled on Oct 18.
Ho highlighted the government’s push for more affordable housing and proposed the formation of a task force comprising government authorities and Rehda to assess the actual demand for affordable housing, considering factors such as targeted buyers, locality, and the number of units.
The Rehda survey conducted in the first half of 2024 revealed that 162 members in Peninsular Malaysia experienced increased business costs compared to the second half of 2023. A significant 69 percent of developers faced construction challenges due to high material prices, shortages, inconsistent supply, rising wages, and a lack of skilled workers.
Materials such as sand, glass, and concrete experienced annual price increases of 13 to 15 percent as of June 31, 2024. To mitigate these challenges, developers have been forced to lower their profit margins, increase property selling prices, and utilize more cost-effective materials.
Despite these headwinds, 44 percent of respondents are planning to launch new projects in the second half of 2024, focusing primarily on landed properties, which continue to enjoy higher demand than high-rise developments. To boost sales, developers are offering assistance with down payments, increasing their use of digital marketing and virtual technologies, and providing discounts to buyers.
The survey reported a modest increase in launches and sales in the first half of 2024. A total of 11,814 units were launched, an increase of seven percent from the second half of 2023. Sales also grew modestly to 13,445 units, with 65 percent of sales coming from previously unsold stock.
The survey also found that serviced residences and two- to three-storey terrace homes were the most sought-after property types. However, 46 percent of respondents reported that their unsold completed units were priced at RM500,000 or below, primarily due to factors such as end-financing loan rejections, low demand and interest, and Bumiputera lots. Ho expressed concern about the number of unsold completed Bumiputera lots, with 33 percent remaining on the market for over 36 months.
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