Eastern and Oriental Bhd (E&O) launched its final batch of landed residential properties at Seri Tanjung Pinang 1 here, yesterday.
The final release comprises just 35 units of terraced houses in the second phase of Ariza Seafront Terraces.
Although the value of residential loans approved, an indicator of property sales, fell 15% in 2016, four out of the seven developers in our coverage managed to grow their property sales by 3% to 77% in 2016. Their sales outperformance, driven by the focus on township and mass-market developments, suggests there is still strong demand for properties in certain segments even though overall property market activities are weak.
Three out of the seven developers in our coverage (Eco World Development Group Bhd, LBS Bina Group Bhd and S P Setia Bhd) target 5% to 21% sales growth in 2017 while Mah Sing Group Bhd aims to at least maintain its FY2016 sales level. UEM Sunrise Bhd is the only developer that targets lower sales of RM1.2 billion in 2017, compared with the actual sales of RM1.4 billion in 2016. However, UEM Sunrise’s 2016 sales included en bloc sale of a commercial property worth RM368 million. When excluded, UEM Sunrise’ sales target for 2017 is 20% higher than the actual sales in 2016.
The undersupply of affordable houses in Malaysia may worsen, given current income and demographic factors, according to Bank Negara Malaysia's 2016 Annual Report.
Bank Negara said since 2012, the increase in house prices in the country had outstripped the rise in income levels.
"Consequently, prevailing median house prices are beyond the reach of most Malaysians. This is primarily attributable to a gross mismatch between housing supply and demand, amid diverging expectations between households and developers.