SP Setia banks on sustainable townships

PETALING JAYA: Early last month, real estate titan SP Setia Bhd made headlines when it announced that the latest phase of its Nadi commercial square, Nadi Phase 3A at Setia EcoHill 2 in Semenyih, had achieved a 70% take-up during the launch weekend on June 22.

While the news was about the group’s success with its latest commercial properties, it can safely be assumed that buyers of Nadi Phase 3A’s commercial lots are confident that their investment will yield healthy returns in years to come, buoyed by the Setia EcoHill 2 township itself, with take-up rates of over 90% for most of its residential precinct phases.

Although SP Setia may be staying optimistic about the prospects of its launches, it is telling on the other hand that statistics from the National Property Information Centre show that residential overhang in the country for the first quarter of financial year 2025 (1Q25) has increased, both year-on-year (y-o-y) and sequentially.

It showed that there were a total of 23,515 completed unsold residential units in Malaysia, up 1.6% from 4Q24 and 2.9% y-o-y from 1Q24.

It reported that Malaysia’s property transaction value fell 8.9% in 1Q25 to RM51.42bil, compared to RM56.47bil in the previous corresponding period, while transaction volume dropped by 6.2% y-o-y, with 97,772 transactions recorded in 1Q25, compared with 104,194 in 1Q24.

Industry experts, such as Zerin Properties chief executive officer Previn Singhe, made the notable observation in June of the fact that 59% of the current overhang is made up of properties priced at RM500,000 or below, and this points to challenges that go beyond affordability.

He noted that factors such as location, product design and quality are likely contributing to the disconnect between supply and demand, as the market is also facing delivery cost pressures.

Rising construction costs and materials inflation remain a threat to margins and may test the financial resilience of smaller or highly leveraged developers.

Meanwhile, buyers are increasingly discerning, demanding better locations, liveability and transparency, Previn added.

SP Setia divisional general manager Koh Sooi Meng told StarBiz that the group’s recent launches have seen encouraging responses, with good take-ups across various developments, particularly of note among first-time homebuyers.

“This reflects not only the sustained demand for quality affordable housing but also the attainable pricing of our offerings,” he said.

According to him, the positive trend is supported by several macroeconomic factors, including rising minimum wages and a declining unemployment rate, which have collectively enhanced the spending power and confidence of homebuyers.

Explaining with an example, Koh said SP Setia’s new 20x70 double-storey terraces in Setia EcoHill 2, priced from RM630,000, translate to estimated monthly instalments of below RM3,000 over a 30-year loan tenure, which he estimates is a competitive rate compared to high-density urban alternatives.

“In contrast, RM600,000 in KL’s city centre may only secure a shoebox-sized apartment, making our suburban developments a far more practical and value-driven choice for growing families.”

On top of prices, he said that SP Setia is also addressing concerns surrounding housing market challenges with helpful packages such as its Easy Home Ownership Scheme; free sale and purchase agreement; loan agreement and memorandum of transfer; zero downpayment, and other rebates.

Koh said the group remains committed to sustainable development, incorporating this concept across all facets of its business.

“A prime example of this vision is Setia EcoHill 2, a mixed township development with a gross development value of RM5bil.

“It offers residents ample space to connect with nature and promote healthier living and outdoor family bonding.

“We have also introduced the Setia e-Green Living concept, which incorporates smart and sustainable home features such as solar panels, smart locks, green switches, rainwater harvesting systems, conduit readiness for electric vehicles, and Box 366, a secure parceldrop-off solution.”