Fewer launches, better deals or the other way around?

Are there fewer property launches in 2016 thus far? I personally do not think so. Maybe because I have been receiving Facebook postings, SMSes and even WhatsApp on a continuous basis. Only few years ago, I did not receive so many of such notifications. Okay, perhaps it’s because they are repeats? Well,  according to the National Property Information Centre (NAPIC) 2015 Property Market Report the number of new launches in 2015 fell by nearly 20 percent. In 2014, it was 88,997 units and in 2015, it was only 70,273 units. Total transactions were skewed towards units which are RM500,000 or lower, at about 80 percent. Now we know why newer launches these days are mostly below RM500,000. Even PR1MA has a ceiling limit of RM400,000.

More numbers as per NAPIC as follows:

Johor’s new launches dropped 42.8 percent to just 9,428 units.

Penang’s new launches, dropped 47.5 percent to just 2,348 units

Sales is only at 41.4 percent which meant there are lots of unsold units after the official launchings. This is lower than the 45.4 percent in 2014.

27.7 percent of all new launches are condominiums and apartments. (Yes, lots of new condos are launched but is there other choice with land prices now sky-high? Oversupply? Read here: Too many condos, don’t buy condo

Napic: Malaysian House Price Index (MHPI) is up 5.8 percent on annual basis, as at the fourth quarter of 2015. MHPI is at 227.5 points from its base year; 2000.

On quarterly basis, the index points contracted by 0.8% for Q4 versus Q3 of 2015.

Napic: Rental rates in Kuala Lumpur generally showed an upward trend. This is especially for prominent schemes as well as those located in the light rail transit and mass rapid transit routes.

There has been recent reports about the number of launches being held back by developers. Some chose to go back to the drawing board. A friend recently commented that, ‘even developers are thinking should I launch or should I not launch.’ Of course, there were also many reports or even comments from industry players that H2 2016 may see a rebound or a recovery of confidence. Based on the current reports, I think this is likely to be tough even if Ringgit happened to be recovering. The reason is simple, every time there’s any negative news, it’s forwarded by many. Yet, when there are some positive developments, it’s not forwarded or dismissed totally. Dear Malaysians, especially those in the property industry, what we do will affect what everyone believes. Happy deciding.

written on 21 Apr 2016

Next suggested article: Property investment, it’s not always rosy

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