Sheda Kuching expects state economy to show more robust growth in second half of 2019

Sim Kiang Chiok

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KUCHING, June 3: Sarawak Housing and Real Estate Developers Association (Sheda) Kuching Branch forecasts Sarawak will enjoy more vibrant economic growth in the second half of 2019.

“Since the change of the federal government in May 2018, they are still struggling to keep up to their promises in their manifesto and have not projected much confidence into the market with their many non-positive or even contradictory statements on the debts level.

“Their direction on the economic policy and target have not been able to attract and hold much foreign investors in Malaysia’s economy as the share market is weak and so is our ringgit.

“However Sarawak’s outlook is better with a forecasted GDP growth of 5 per cent for 2019. This is due to the huge expansionary state budget of RM11.1 billion with RM9 billion for development of infrastructure, digital economy, logistics and the ongoing (construction of the) Pan Borneo Highway which is funded by federal government. This will create jobs opportunities and spin off which will drive the economic growth of the state,” said Sheda Kuching chairman Sim Kiang Chiok in a statement today.

He noted that the housing market was slow in the first half of 2019 due to difficulties to raise end financing by purchasers over the last three years, due to strict lending guidelines which is based on the proven income method instead of collateral based lending.

“I foresee that this condition will still be enforced until the price escalation of properties slow down to a manageable level, while not affecting the increase in overhang properties and new properties can continue to be launched,” he said.

In terms of the recent monetary policy of lowering of interest rates by the Bank Negara, Sim said such a move would be “good” for house-owners, new purchasers and developers.

“The Bank Negara cut in interest rates from 3.25 per cent to three per cent is a sure indicator that the economy is slowing down and there is need to lower the interest rates to encourage more economic activities at a lower cost.

“This is good for all house owners with housing loans as the repayment will be lowered as well as for the new purchasers who can afford a higher priced house or enjoy a lower repayment.

“This is also good for developers as it is easier to sell their houses and reduce their capital cost,” he said.

Sim also said housing is a basic need of all humans and there will be always demand for houses when the population is growing, good job opportunities are available and when banks are supportive of lending.

“I foresee Sarawak’s second half of 2019 (to be) better than the first half of 2019. Hopefully we are riding on the rising curve from the bottom of the first half 2019,” he said.

In terms of the world economic outlook, he also foresaw an improvement in the second half of 2019 as compared to the first half. — DayakDaily