Expect more auction properties as economy weakens

KUALA LUMPUR (April 1): As the present COVID-19 pandemic and the Movement Control Order (MCO) pile more pressure on Malaysia's economy, the housing property market will not be spared either and more properties are expected to be put up for auction in the near future,  said real estate consultancy Knight Frank Malaysia.

"There will be potential for more job layoffs due to the challenging business environment. Thus, we foresee an increase in non-performing loans that will conclusively lead to more auctions in the [residential] market,” said Knight Frank Malaysia managing director Sarkunan Subramaniam in a media statement yesterday.

Besides, he added, both buyers and sellers have become more vigilant amid the outbreak. "A wait and see approach is prevalent as people will try to avoid showrooms and sales galleries during this critical period. There are also disruptions to the property transaction process, such as difficulties in conducting property viewings and conducting title searches." he said.

Nevertheless, he said Bank Negara Malaysia's (BNM) announcement on the automatic moratorium on loan repayments for small and medium enterprises (SMEs) and individuals and the reduction of the Overnight Policy Rate (OPR) by 25 basis points to 2.5% may help to cushion the impact in the short term.

Although the rakyat-centric economic stimulus package that was announced by Prime Minister Tan Sri Muhyiddin Yassin on March 27 is applauded, Sarkunan felt that there should be more initiatives to sustain the economy and businesses.

"It may be timely to waive property taxes such as quit rent and assessment for the second half of 2020. Further stamp duty should be reduced and tax reliefs given to landlords who grant rent waivers to their tenants in order to help in the recovery process of businesses and the country’s property market," he suggested.

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