PETALING JAYA, 26 April 2020 – The real estate industry, players and financial institutions are expected to come out of the post-COVID-19 and post Movement Control Order (MCO), relatively unscathed.
This, as real estate industry experts, believe that the sector, its players, financial institutions, large firms and private limited companies, as well as individual property buyers, are in a better position now compared to the Asian Financial Crisis of 2008.
Three real estate industry veterans invited by the Malaysian Institute of Estate Agents (MIEA) recently shared their insights with the on the current real estate market outlook amid COVID-19 and the MCO, were optimistic. Speakers included Eric Lim, Founder and Group Managing Director of Hartamas Real Estate Group, Datuk Seri Michael Yam, CEO and Managing Director of Impetus Alliance and Stephan Tew, Director of Axis REIT Managers Bhd.
The forum titled “The First MIEA Multi-Sector Market Outlook”, moderated by Previn Singhe, Managing Director and CEO of Zerin Properties, and took place on 23rd April was held via a social media platform is part of the MIEA HOPE Programme aiming to help MIEA members to enhance themselves during the current uncertain times.
The veteran real-estate industry trio shared their thoughts on the residential, commercial and industrial sectors of the property market outlook.
They also looked at the property market’s exposure, the steps taken to alleviate the impact of COVID-19 as well as the MCO and the measures taken to mitigate the effect in moving forward in the sector.
Previn in his opening remarks said the nation’s property market was showing signs of recovery before the COVID-19 pandemic and the MCO being imposed.
However, he said there was also no rush by the corporate sector to lease offices and also, both commercial and residential properties were also feeling the pressure of property oversupply.
He added that how COVID-19 would affect the property market in Malaysia is tough to predict.
Immediate past president of MIEA, Eric Lim said before the MCO was imposed, the gap between the asking price of a property and the offer price was somewhat slightly wider.
However, in the current situation, property owners were willing to lower down the asking price to a more reasonable level. Hence he mentioned that this a a great opportunity to purchase residential properties if one has the financial ability.
In terms of new residential property, Lim believes that developers are also offering more attractive packages including additional discounts, higher rebates, furnishing, etc to attract more buyers.
Yam said the current situation is also a golden opportunity for developers to relook into the market and also to expand their capacity. Lim, meanwhile believes that the nation’s current economic situation is in a much better position, compared to the 2008 Asian Financial Crisis.
Lim added that many developers are also seeking for a joint venture with landowners, making it much more manageable in times of crisis.
Tew added by saying that banks are now more proactive this time around by offering stimulus packages and loan deferments to help many business owners and individuals during this time of crisis.
He also highlighted that different economic sectors are also affected differently and the key is to understand which sectors would be affected badly.
Based on experience, small business owners especially those whose earnings are based on hand to mouth basis are the ones that are likely to be affected the worst, he said.
To spur the real estate market, Yam is hopeful that the government would continue the Home Ownership Programme (HOC) where it has helped not only developers but buyers too.
In addition to purchasing a property, bank interest rates could also be maintained and the government could also review the Real Property Gains Tax (RPGT) policy.
Tew added that the government should encourage more buy and sell activities, ultimately by lowering the RPGT momentarily as stamp duty and other charges helps the government raise more money than income from RPGT
Lim also added that the relaxation of the existing lending policy by Bank Negara would also help spur the property market, further.
Besides, he said the lowering of the foreign property buying threshold in Selangor would enable more foreigners to purchase properties., which would also contribute towards reducing the existing property overhang and address the glut in the property market.
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