Businesses can only continue to exist if they have profits or if they kept getting fresh funds from investors even when they keep losing money year after year. This is the case even for ‘not-for-profit’ organisations These organisations must still have surplus so that they can grow what they do and hire good people. Let’s be real, not many rich people are willing to work for free. For the rest of us, a salary is a must even if you are working for a company looking to save all the animals in thee world or alleviating poverty for example. When it comes to property developers, the modus operandi is quite straight forward. Launch and sell. When they finish selling, then launch new projects. What happens if they could not finish selling? Well, if it’s very earlier on, some developers may choose to return the cheques and stop the project. If it’s later on and they have already started construction and still not fully sold when completed, we will see the advertisements to sell after the keys have been handed over. ‘Limited units available for sale,’ or even the ‘You are lucky, we still have a few units left.’ kind of message.
By the way, this does not mean the project is not good yeah, it may also be due to their insufficient marketing activities (especially to those developers who think only newspapers is enough…. 😛 ) or somehow the market was too slow then and later on when the market improves, buyers were attracted to newer projects instead. So, what’s up with the market currently? It seems that some developers remain very positive. 6 of them are lining up to launch RM6 billion worth of projects nationwide. This is despite that never ending viral news about ‘unsold units which is actually increasing.’ Let’s also not forget the slightly painful with a higher interest rate not too long ago. The six developers who are launching more even with these negative news include Ideal Property Sdn Bhd with over RM550 million of launches, IJM Land Bhd with RM987 million, Mah Sing Group Bhd with RM2.2 billion, Aspen (Group) Holdings with RM959 million and Eastern & Oriental Bhd with RM1.6 billion. Here’s that full report in TheStar for reference yeah.
Reported in the article, Mah Sing says that it is focused on units within the price range of RM328,000 and RM550,000. ItsExecutive chairman Tan Sri Leong Hoy Kum says that Mah Sing will leverage on the digital marketing to reach out to the younger target audience. Based on HSBC Housing Survey 2017, Leong says 94% of Malaysian millennials have yet to own a property and plan to do so in the next five years, which effectively means there will be “long-term demand”. EcoWorld (north) general manager Chan Soo How says that 2018 will be tough but, “Malaysia’s strong fundamentals bode well for the outlook going forward. For example, Malaysia’s population is young with an average age of 30 to 31 years old. Unemployment remains low at just over 3%. GDP is projected to grow further. The GDP was 6.2% in the third quarter of 2017.”