What explains the glut of unsold units, according to Rehda?

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Loan Rejection Rates Cited as Primary Reason for Unsold Property Glut

The high rate of loan rejections by financial institutions has been identified as the foremost reason contributing to the significant volume of unsold properties, according to findings released by the Real Estate and Housing Developers Association (Rehda). This situation persists despite a reported increase in overall property sales during the latter half of 2023.
High Loan Rejection Rates Impede Sales

Rehda's survey indicates that a substantial portion of properties sold between July and December of last year were existing stock rather than new launches. The primary factor hindering the absorption of new units and contributing to the backlog of unsold inventory is the elevated rate at which potential buyers' loan applications are being rejected. This suggests a disconnect between the availability of properties and the ability of buyers to secure financing.
Developers Focus on Clearing Existing Stock

The survey revealed that only 39 per cent, or 4,627 units, of the total 12,017 residential units sold in the second half of 2023 were new launches. This indicates that over 60 per cent of sales were attributed to clearing existing, unsold units. Consequently, a significant number of developers, over 60 per cent of the 152 respondents, are indicating no plans to introduce new properties this year, signalling a strategic shift towards managing current inventory.
Shift in New Property Launches

In line with the focus on clearing old stock, new residential unit launches saw a notable decrease of 23 per cent in the July to December 2023 period compared to the first half of the year. A total of 14,392 units were launched in the first half of 2023, a figure that Rehda’s latest survey suggests has been curtailed as developers reassess market conditions and inventory levels.

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What explains the glut of unsold units, according to Rehda?

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