KUCHING, April 19: Sarawak Housing and Real Estate Developers’ Association (Sheda) Kuching chairman Sim Kiang Chiok foresees that the prices of houses will stabilise with a slight decrease after the Movement Order Control (MCO) is lifted.
In a statement, Sim noted the country is in a unprecedented situation while other major countries are also under lockdown, due to the Covid-19 pandemic which has also affected Malaysia’s economy.
“To understand the pricing of properties and in particularly housing, we can look at various factors but the most fundamental factors are supply, demand, bank financing, location and type of properties for different income segments,” Sim revealed.
He pointed out that property market has been poor during the previous few years, even before the MCO and presently, property prices have already adjusted downwards with the Home Ownership Campaign (HOC) and stringent bank financing rules by Bank Negara.
“Our government has foreseen that this pandemic will require us to have lockdown which will effect our incomes, jobs and businesses. Hence the federal and state governments have rolled out various stimulus packages to assist all sectors of society where they cover almost everyone including the daily paid, small traders and SME in cash handouts, micro business grants, wage subsidies, a bank moratorium for six months from April for bank loans repayments, micro and SME bank loans, and other incentives and discount in utilities rates and assessment rates, among various other assistance.
“With the six-month bank moratorium and three months’ wage subsidies, it will help with the cash flow of supply (for developers) and keeping jobs. After the six-month moratorium period, the prices of properties will depend on how well our economy restarts itself and how many jobs are lost or new ones created. If the loan defaults are low and not many forced sales after the six-month moratorium, property prices will be stable and with low discounts,” Sim opined.
If the Malaysian economy is able to restart and resume quickly to its earlier momentum, Sim believed businesses and incomes might not be adversely affected, at least after 12 months, bearing in mind that every sector must play their part to ensure the stimulus packages are being implemented as quickly as possible and all pump-priming economic activities must take off as well.
“Banks must also assist Bank Negera and the government to reduce the very high standard of evaluation in giving out loans so that the much needed micro, special relief loans to the SMEs can be released quickly to them. This would ensure businesses can still operate and continue to provide employment in the shortest period.
“However if our MCO and other major world economies’ lockdown have to be dragged on for a longer period, then our government will have to further adjust their stimulus packages to cater to the longer shutdown period. The government may have to extend the moratorium, wage subsidies and cash handouts or else there will not be sufficient time for the economy to restart and to regain its momentum,” Sim added.
Therefore, in view of all the above, Sim believed that prices of houses in Sarawak will depend on how well the state executes its exit plan after the MCO is lifted and how fast the country’s economy can be revived until the end of the bank loan moratorium which ends in September 2020. — DayakDaily