MKH expects a tough FY2017, hopes to maintain FY2016’s sales performance

KAJANG (Nov 28): MKH Bhd is expecting a challenging year ahead. Nevertheless, it aims to to achieve a sales performance on par with FY2016.

“We would have to work harder in FY2017 to achieve last year’s figure which was about RM800 million,” group managing director Tan Sri Eddy Chen told TheEdgeProperty.com. Its financial year 2017 ends Sept 30, 2017.

“We are trying to maintain the sales target last year, we may still achieve the target in FY2017 but it is going to be tough,” he said.

He said with no easing of the lending policy, 2017 will be a challenging year for the entire housing industry.

“The main issue still remains. Approval rates for home loans are still low,” he said, adding that the current headwinds in the global economy will also dampen the industry.

In addition, the weakened ringgit would cause serious inflation in Malaysia and drag down the purchasing power of consumers, he said.

“The bottom 40% (B40) and middle 40% (M40) income groups will be the most impacted by this inflation, while the top 20% (T20) income group will be cautious in their spending.”

In 2017, MKH will launch projects worth over RM1.5 billion across Kuala Lumpur, Kajang, Mont’Kiara and Shah Alam, which comprise landed homes, high-rise properties and affordable housing, said Chen.

“Our target buyers will be the upper part of the M40 group and the lower part of the T20 group, which we believe are the more resilient groups of buyers,” he added.

Chen pointed out that the plantation business will help the company get through tough times ahead as crude palm oil prices have gone up.

Meanwhile, Chen also hopes Bank Negara Malaysia will cut the overnight policy rate (OPR) to ease the financial burden of Malaysians and to reduce household debt in the country.

“Some say that the central bank would increase the OPR, which I think will impact the people greatly,” he said, citing that a 50 bps increase in the OPR would push up the monthly mortgage instalment by 10% to 20%.

“I hope banks can consider lowering the interest rate to give people a chance to service their loans, and this will help to reduce our household debt,” he urged. “This is going to help a lot and is probably one of the biggest stimulus, but I believe the government’s hands are tight as oil prices are still low.”