Unexciting sales outlook for properties despite relief from GST
KUCHING: As property developers continue to miss expectations of Kenanga Investment Bank Bhd (Kenanga Research) -- signifying a decline in the sector’s performance, analysts said it was harder to predict sales momentum this year as most developers are actively clearing inventories or properties close to completion.
Kenanga Research in its sector overview noted that performance of property developers was worse than the previous quarter.
Out of 13 developers under its coverage, 46 per cent missed expectations, only one stock exceeded expectations while the rest were within to broadly within.
“This is worse than last quarter whereby 31 per cent of coverage disappointed while 31 per cent positively surprised,” it said in the note yesterday. “The main issue faced this quarter were margin compressions arising from higher overheads and lower product margin mix.
“More misses with headline sales with 38 per cent of our coverage were behind in terms of meeting targets while the rest were in-line to broadly in-line.”
The research firm observed that many developers held back new launches running up to the 14th General Election (GE14) as buyers were holding back given the uncertainties.
“Also, this year, most developers are looking to clear inventories and take-up rates of these inventories can be sporadic or unpredictable,” it added.
“We are observing very heavy marketing campaigns by most developers such as rebates, discounts, freebies, ‘ deferred payments’ on differential sums for shortfalls seen in many buyers’ margin of finance. Turn to Page B2, Col 5