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KUCHING, Dec 30: The demand of residential properties in Sarawak is projected to slow down in the last quarter of this year following increase in interest rates.
This was in reference to Bank Negara Malaysia’s (BNM) latest revision in its overnight policy rate (OPR) by 25 basis points (bps) effective Nov 3 – the fourth time this year which sees a hike from 1.75 per cent in July 2020 to 2.75 per cent at present.
Sarawak Housing and Real Estate Developers’ Association (SHEDA) Kuching branch chairman Dato Sim Kiang Chiok said based on a report by National Property Information Centre (NAPIC), the total number of various residential properties in Sarawak has increased from 284,610 units in 2019 to 302,734 units as of third quarter this year.
“This shows the pent-up demand in the Covid-19 pandemic lockdowns are being satisfied. However, the overhang in residential properties also shows an increase from 1,847 units in 2019 to 2,314 units in the third quarter of this year which shows that more houses are being built to match the demand.
“Meanwhile, for residential transactions in Sarawak, the number of properties up to the third quarter of 2022 are 8,662 units with total value of RM2925.29 million, which is almost the same as 8,841 units in 2019 with the value of RM2,605.38 million.
“However, we can expect for the last quarter of this year, the demand of houses will be slowed down by the increase in interest rates which has made the houses more expensive and higher in the repayment of housing loan,” he said in a statement today.
On the other hand, Sim said the commercial and industrial properties are still slow in recovery, perhaps, due to the difficulty in raising capital to carry out commercial activities and work-from-home practice which is still in use.
According to him, commercial properties in the third quarter of this year is showing poor transaction with a record of 714 units – less than half of the total transaction in 2019 at 1,854 units.
For industrial units, the transacted units stood at 163 units which is only about one quarter of total units recorded in 2019 at 474 units.
He also said based on a report by Malaysian Industrial Development Finance Berhad (MIDF), the total loan applications and approvals in October this year have dropped by 15 per cent and five per cent, respectively.
“It would be good if there is no more increase in interest rates as the economy is still recovering from the Covid-19 pandemic lockdowns and Russia/Ukraine war which caused supply chain disruption and slow down in the major economic countries that will make 2023 challenging for our economy.
“Our hope is that the federal and Sarawak governments will continue with its caring policy not only to reduce cost of living but also cost of doing business in Sarawak and Malaysia,” he added. — DayakDaily