Mah Sing expects property sales to pick up in H2

Mah Sing Group Bhd is hoping for the property sales momentum to pick up in the second half of the year, as softer consumer sentiment and tighter housing loan processing conditions affect the housing market.

“At this juncture, it is still premature to revise or adjust our sales target,” said executive director Datuk Steven Ng Poh Seng after the company’s AGM.

Shareholders approved resolutions, including a first and final single-tier dividend of 6.5 sen per share for the previous financial year ended Dec 31, 2014 which represented 44% of net profit.

As of April 22, Mah Sing’s sales hit RM761mil, which is 22.2% of its 2015 sales target of RM3.43bil.

“In the first quarter, our sales of RM560mil was short of our RM800mil target. The feedback from buyers; it is not like before. Loan processing is taking longer, and it is getting harder to get financing,” said Ng.

He said consumer sentiment has been affected by factors such as the implementation of the goods and services tax (GST), the weaker ringgit and lower commodity prices.

“We think that consumers are in a temporary adjustment period of six to nine months, post-GST implementation,” said Ng.

Ng also noted that in the first quarter, the house price index was forecast to have decelerated to a single-digit growth rate of 4.1% based on the National Property Information Centre data.

This is in comparison with the previous four years, where the growth rate for the house price index ranged from 9.9% to 11.8%.

“So, we don’t think house prices are dropping. We are likely looking at single-digit price growth this year, or in the worst case, zero growth in house prices.”

He pointed out that demand continued to outstrip supply for the affordable residential segment, due to the country’s young population profile where 70% were below 39 years, urban migration and a healthy employment situation.

“More than 200,000 marriages are registered annually.

This has created a supply-versus-demand gap, as only 70,000 to 90,000 new homes are completed every year.”

The property development group’s managing director and chief executive Tan Sri Leong Hoy Kum said 84% of its planned residential launches this year is priced below RM1mil.

“A total of 71% of our residential launches are priced below RM700,000 and 44% priced below RM500,000. Our strategy of reaching out to the mid-range mass market is in line with current market needs,” said Leong.

“For example, the group’s mid-range mass market products like Savanna Executive Suites@Southville City (priced from RM433,000), D’sara Sentral Serviced Residences, Sungai Buloh (from RM597,000) and Lakeville Residence, Taman Wahyu (from RM600,000) offer attractive lifestyle concepts as well as improved accessibility and connectivity.” - By The Star