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Property overhang won’t worsen as loan moratorium ends

September 30th, 2020 Leave a comment

recovery

The Real Estate and Housing Developers’ Association Malaysia (Rehda), which is cautiously optimistic about the outlook of the property sector, hopes for better improvement in the first half of 2021 (1H2021), provided there is no new community transmissions of the COVID-19 pandemic in the country.

The expected sales will further improve in 1H21 in line with the economic recovery and the ongoing Home Ownership Campaign (HOC), as well as the low interest rate environment, its president, Datuk Soam Heng Choon said.

“With the ending of the moratorium, which falls today (Sept 30), I think financial institutions are giving targeted help both through extended moratoriums and also through restructuring and refinancing of loans for those buyers who still need assistance.

“This is because there may be people who are still unemployed or have had salary cuts in certain sectors of the economy — that has not seen recovery, especially those in the hospitality sector,” he told a press conference on the upcoming HOC-Malaysia Property Expo 2020-2021, here today.

 The expo will be happening from Friday to Sunday (Oct 2-4) at the Mid Valley Exhibition Centre, here.

Soam said the projection of the better outlook next year was due to many uncertainties that is currently going around in the country and the world.

However, seeing at how Malaysia has been well in tackling the COVID-19 pandemic, he is confident that it is projecting a positive picture for the public to buying properties in the country.

 “Besides, people has also begin to realise that property is one of the better investments to protect them against depreciating currencies globally,” said Soam.

In the effort for people to own a house and realising that there are still groups that are unable to afford including those in the gig economy, Soam said discussions including on the rent-to-own scheme is still on the table, but the government needs to play a bigger role and get the financial institutions to come in.

“I think there have been some banks out there providing step up financing, meaning that in the first five years, you don’t pay your principal, buy you only pay the interest. Only after five years you pay the principal plus interest,” Soam said.

He elaborated that Rehda is encouraged by the idea as by the end of the loan period in the step up financing, the total quantum that is paid in principal plus interest is more or less the same as the conventional process.

Meanwhile, on the HOC-MAPEX 2020, Rehda vice president Datuk Tong Nguen Khoong said Rehda is not setting a target sales for this year’s event as it started only in August.

“All we can say that we are not expecting the figures to be on the level as in 2019,” said Tong.

The event will see 35 exhibitors, including 25 developers and three financial institutions, six government agencies, and one other where for people who are interested have the opportunity to compare projects and talk to financial institutions and government agencies in terms of what it can do to help with the homeownership effort.

Admission is free to the public.

In 2019, the event sold 57,000 units of property with a total discounted figure of about RM37 billion.

The HOC 2020-2021 is an initiative announced by the Prime Minister Tan Sri Muhyiddin Yassin on June 5, 2020 under the Short-term Economic Recovery Plan (PENJANA whereby Malaysian house-buyers will be exempted from stamp duties for purchase of residential units made between June 1, 2020 to May 31, 2021.

Source: Bernama

 

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