The local real estate market is anticipating another rate cut for the overnight policy rate (OPR) this year, which bodes well for property developers' housing sales.
There is a possibility of the benchmark interest rate reducing further from three per cent to 2.75 per cent.
LBS Bina Group Bhd has set its 2020 property sales target at RM1.6 billion, a conservative target given that last year it achieved RM1.63 billion in property sales.
The property sales recorded last year was 6.82 per cent higher than the RM1.53 billion achieved in 2018, in spite of the challenging market conditions caused by softening consumer sentiments and global trade tensions.
Its managing director Tan Sri Lim Hock San is bullish to achieve RM1.6 billion in property sales this year with 18 ongoing projects and its pipeline launches.
Lim said that the OPR cut by BNM in May 2019 had boosted the group's property sales last year as it gave confidence to homebuyers.
Another contributing factor was the Home Ownership Campaign (HOC) that ran in 2019.
“We are very pleased with our achievements as it validates our approach to develop projects that meet the three main pillars of affordability, connectivity and community. LBS has continued to focus on quality townships and affordable developments in strategic locations, a segment that remains relatively strong in a subdued market sentiment. This focused approach has proven effective, as reflected in LBS’ financial performance," he said at the LBS Bina 2020 Outlook and Market Opportunities briefing briefing yesterday.
Lim said that LBS is sustaining well amidst a challenging economic and property market environment as a result of its ‘people-focused’ approach and wider adoption of Industrialised Building System (IBS) and design optimisation.
From 2014 to 2019, the group's property sales achieved a 20.37 per cent compound annual growth rate (CAGR).
Last year, LBS launched 11 projects with a combined gross development value (GDV) of RM1.82 billion across five locations.
According to Lim, sales were secured mainly from projects in the central region.
He said, the two key township projects, KITA @ Cybersouth, which was officially unveiled in April 2019, and LBS Alam Perdana township, have been the main sales contributor.
On-going landed developments like Emerald Garden 3 and Laman Bayu in Bandar Putera Indah township, Johor and Taman Kinding Flora in Chemor, Ipoh, also contributed to the group’s solid performance, he said.
As at December 2019, LBS has landbank size of about 1,469 hectares.
The group plans to launch properties worth RM2.321 billion this year, underpinned by positive underlying demand for its new projects.
Lim said, the projects which will be concentrated in the central region are predominantly new phases of on-going developments including KITA @ Cybersouth township, LBS Alam Perdana township and Midhills 2.
The other projects to be unveiled in 2020 included single-storey link houses in Bandar Putera Indah in Batu Pahat; semi-detached units and double-storey terrace houses in Cameron Golden Hills in Cameron Highlands; and affordable single storey houses in Chemor, Perak.
“Moderating housing sentiment and tightening lending criteria will carry on this year. But, as the people’s developer’, LBS will continue to think out-of-the-box, to appeal to the needs of modern homebuyers. We differentiate ourselves through placemaking, curating spaces that celebrate inclusive, meaningful living experiences," said Lim.