PETALING JAYA (July 13): The reintroduction of the Home Ownership Campaign (HOC) will provide the sluggish property market a much needed boost, according to Knight Frank Malaysia managing director Sarkunan Subramaniam.
“During the first half of the year, the central areas of Kuala Lumpur saw fewer residential project launches and lower levels of transactional activity. Still, against this backdrop, we observed active bookings of rightly positioned residential products of reputable developers in city fringe and popular / upcoming suburbs. The reintroduction of the HOC featuring stamp duty exemptions and the uplifting of margin of financing limit for the third housing loan onwards for property valued at RM600,000 as well as Real Property Gains Tax (RPGT) exemption unveiled in the short-term Economic Recovery Plan (PENJANA) will help to simulate the property market," said Sarkunan in Knight Frank's 'Real Estate Highlights 1st Half 2020' research report today.
The report noted that the residential market showed signs that it had bottomed out late last year. "However, the onset of the COVID-19 pandemic in 1Q2020 continues to bring much uncertainty and this has derailed the recovery momentum. With severe disruptions to the economy leading to rising unemployment, potential buyers and investors have delayed making big-ticket purchases," the report said.
"The lower monthly loan repayments coupled with the automatic loan moratorium for six months from 1 April will provide some financial relief to households amid the current crisis. Also, with lower monthly repayment sum, borrowers who failed to obtain a loan due to the restriction of one third Debt Service Ratio (DSR) rule, may now have higher chances of securing financing," added Sarkunan also noting that the reduction of the the Overnight Policy Rate (OPR) to 1.75% last week will help speed economic recovery.
“The residential market is expected to see a slow uptick post-MCO, supported by various stimulus provided by the government, especially the reintroduction of the HOC featuring stamp duty exemptions and other incentives. Developers may also reconsider their product positioning and marketing strategies including leveraging on the technologies and partnering with e-commerce platforms to improve their sales moving forward”, he concluded.
Meanwhile, in Kota Kinabalu, according to Knight Frank Sabah executive director Alexel Chen, some developers are now relooking into their products with a shift in focus to quality and well-priced residential products, both landed and high-rise at mature and growing residential areas. "In Malaysia where the homeownership rate remains relatively high, there are still genuine homebuyers in the market awaiting for the right residential products,” noted Chen.
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