The Malaysian Real Estate and Housing Developers' Association (Rehda) says the greatest problem for developers and homebuyers remains access to financing.
"In the current situation, we believe developers and homebuyers are waiting for banks to adopt a more favourable approach to financing arrangements," said Datuk NK Tong, president of Rehda Malaysia.
According to the Malaysian real estate industry survey 2H 2022 by Rehda Malaysia, 86 per cent of the 134 respondents reported finance issues (bridging financing and end financing) for buyers and/or projects.
More sales required before drawdown (average percentage of higher sales required: 46 per cent), banks requesting more documents, and unfairly capping loan amounts are the top three bridging finance concerns.
The top three reasons for end financing loan rejection are ineligibility of purchasers' income, lower margin of financing supplied, and poor credit history.
Tong said at the media briefing of Rehda Property Industry Survey 2H2022 and Market Outlook for 2023 today that 66 of loan rejections were in the RM700,000 and below price category.
Meanwhile, for 14 of the 119 respondents, the rate of loan rejection over sales for residential properties was greater than 50 per cent.
According to the poll, 61 per cent of developers have unsold residential units, with the majority of them priced above RM1 million (23 per cent), followed by units priced between RM400,001 and RM500,000 (15 per cent), and RM500,001 to RM600,000 (11 per cent).
Apart from end-financing concerns, the main reasons for these unsold units include unsold Bumiputera lots and low demand.
"Twenty years ago, when you launch a property, it was easily sold within a few weeks. But today, the environment is a little different because people have choices. Access to financing too is tricky. As we come out of the pandemic, and we now have a new government with the right moves might boost confidence and this will contribute to the speed of sales," said Tong.
