The property market is seeing better days, while uncertainty was the concern in the first half of the year, 2H is looking more visible after a slew of initiatives was introduced by the government. Across the board, property players are reporting an uptake in new properties with residential units witnessing a boon.
Established developer S P Setia has just released its third quarter sales numbers and they are looking rather peachy, the group has already achieved RM2.26 billion in property sales and is on track in reaching its 2020 target of RM3.80 billion. Although accumulating a loss due to impairment occurred with the Battersea Project, the group is optimistic and sees no long term impact on its cash flow. During the first nine months local projects contributed RM1.85 billion or approximately 82% of the sales whilst the remaining RM410.0 million or approximately 18% were contributed largely by international projects such as UNO Melbourne, Sapphire by the Gardens and Marque Residences in Australia as well as Daintree Residence in Singapore. On the local front, sales were mainly from the Central region with RM1.36 billion, aided by RM306.0 million contribution from the Southern region while Northern region contributed another RM160.0 million. The total sales secured were complemented by the concerted effort in clearing completed inventories, whereby RM462.0 million worth of completed inventories were monetised during this period.
“We are heartened that as at 31 October 2020, our sales and secured bookings stood at RM2.86 billion and RM1.67 billion respectively. We noted that many potential buyers realised the importance of owning a home that complements their lifestyle and needs under the new norm. Our key focus for the next 2 months would be on the swift conversion of these bookings into sales, and hence, we believe we have a fair chance to achieve our sales target of RM3.80 billion set for this financial year,” said Dato’ Khor Chap Jen, President & CEO of S P Setia Berhad.
As part of the effort to stimulate the national housing sector activities, the Government supported and reintroduced the Home Ownership Campaign (“HOC”) 2020 which was well received by the buyers at large. Additional incentives are given, such as uplifting of the loan margin and exemption of RPGT for disposal of residential properties also contributed an uptick in buying interests. “The OPR cuts which totalled to 125bps year-to-date to an all-time low of 1.75% provided the much-needed cushioning and support to the housing demand, particularly in the primary market.
We can see a relatively stronger recovery in the loan application growth for residential property purchases and are mainly owner-occupied and in the mid and affordable market segment,” added Dato’ Khor.
Growth for SP Setia continues to come from its trusted townships, namely in Setia Alam, Bandar Kinrara and Alam Impian where several landed residential projects with a combined gross development value of approximately RM340.0 million in underway. According to the developer the take-up rate is strong, especially in the midrange landed units like the 2-storey terrace houses in Alam Impian priced at RM730,000 onwards recording a 92% take-up rate.
Backed by an unbilled sales totalling RM9.82 billion, the Group is secure for the next two years and will be busy by its 48 on-going projects. SP Setia also has remaining land banks of 8,653 acres with a Gross Development Value of RM137.44 billion for future projects.