KUALA LUMPUR (March 26): Housing prices in Malaysia are under pressure and Malaysian homebuyers could pick up some real bargains soon as the property market turns sour with the current COVID-19 outbreak, according to real estate consultancy Savills Malaysia managing director Datuk Paul Khong.
Coupled with the country’s own internal political and economic issues, he said the Movement Control Order imposed by the government to stem the spread of the COVID-19 which began on March 18 until April 14 (extended from the initial date of March 31) will see many sectors including the property sector struggling because of limited business activities.
“No major property transactions are expected during the period and the property sector is expected to take a hit together with all other sectors.
“Various degrees of impairment in pricing are envisaged depending on the duration of this outbreak,” said Khong who also expects more properties to be put up for auction in the near future.
With the MCO period extension, survival of companies that need to pay out salaries will be challenging. “The important thing now is to help businesses survive and stop job losses so that properties would not go into fire sales,” he told EdgeProp.my via email.
Hence, he said Bank Negara’s announcement of a six-month loan/financing deferment package is therefore timely as this would offer the market some breather and help property owners hold on to their assets a bit longer thus delaying properties from falling into foreclosures.
“Hopefully towards the end of the six-month deferment period, the market would have seen some improvements. While it remains unknown when the COVID-19 pandemic will be contained, it is very helpful to inject cash flow directly to the system and into the borrowers’ bank accounts,” said Khong.
He however, reminded borrowers that there is no interest waiver during the deferment period.
“The loan deferment should not be viewed as a free payout but rather as a small loan given by the bank to ease daily cash flow. Borrowers would eventually need to repay it so they still need to be careful with their cash flows,” he warned.
Meanwhile, Real Estate and Housing Developers Association Malaysia (Rehda) president Datuk Soam Heng Choon noted that at this point of time, there is no notable change in property prices, but property sales is close to a standstill during the MCO period.
“If the pandemic effect is prolonged, eventually the developers will have to readjust their selling prices for the sake of cash flow, as the more important thing is to survive,” he said.
“It will be a difficult period for the developers but I believe after the MCO is over, sales will slowly return,” Soam added.
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