VPC Alliance (KL) Sdn Bhd MD James Wong believes the reintroduction of the Home Ownership Campaign (HOC) will encourage developers to launch more projects this year, particularly in the affordable housing segment of under RM500,000.
He said very few housing projects were launched during the first quarter of 2020, while developers hardly made any new launches following the rollout of the Movement Control Order (MCO) on 18 March.
“Hence, we expect more new housing projects to be launched by developers as the MCO (has been) gradually eased and when it is finally lifted,” The Malaysian Reserve (TMR) quoted him as saying.
If you are not sure what is the Home Ownership Campaign, we have all the details here.
In a previous report, TMR said the number of new developments is forecasted to fall this year due to the slower economic growth brought about by the COVID-19 pandemic and the lingering property overhang.
According to the Property Market Report 2019 of the National Property Information Centre (NAPIC), new launches fell 9.2% from 66,040 units in 2018 to 59,968 units in 2019.
Nonetheless, the overall sales performance rate improved by 40.4% in 2019 from 34.6% in 2018, thanks to the government’s HOC.
Malaysia’s residential property overhang fell 5.1% in volume and 5.3% in value to 30,664 housing units worth RM18.82 billion last year from 32,313 units valued at RM19.86 billion in 2018,
Commercial property overhang, on the other hand, jumped 40.9% in volume and 49.6% in value to 25,044 units worth RM20.81 billion in 2019 from 2018’s 17,769 overhang units valued at RM13.91 billion.
Given the lifting of the 70% margin of financing limit and the Real Property Gains Tax (RPGT) exemption offered under HOC, Knight Frank Malaysia Sdn Bhd MD Sarkunan Subramaniam expects sales within the secondary market to increase.
CCO and Associates (KL) Sdn Bhd ED Chan Wai Seen, however, believe it is not a good time to dispose of secondary homes partly due to the competition from the primary market a well as the weak market sentiments.
“However, if the owners are forced to dispose of the homes due to unemployment, for example, they would do it and might be at a lower price.”