While no one would know when the COVID-19 will be effectively contained, the pandemic is definitely further dampening the already sluggish property market in Penang since its outbreak in March.

To hear some views from industry experts, an email interview was conducted with Ms. Christina Choong (MIEA Penang Branch Chairman) to discuss the impact of COVID-19 on the property industry and some tips for property buyers.

Q1. As the Penang Branch Chairman of MIEA, from your perspective, how is the Penang property market disrupted due to the Covid-19 pandemic?

Due to the pandemic, the property market is seen to be one of the most impacted among the many business concerns. In Penang, the hospitality industry came to almost a standstill with many related to this industry losing their jobs.

Due to the closed border and traveling being affected and the MM2H program temporarily suspended, the foreign investors have come to a standstill and the rental market is facing a drop in demand.

Rentals for commercial and retail lots have dropped due to the closure of businesses and its demand has decreased and in view of this, the existing tenants are requesting for lower rentals.

Many developers have deferred their project launches as many people are more concerned about their businesses, jobs and income losses than purchasing a property now. We expect some projects under construction to be delayed due to the disrupted MCO period.

Although the Federal and Penang Govt has announced few incentives packages for the property sector, the demand for properties is still dampened resulting in prices to ease slightly.

As they say in any adversity there is an opportunity and the investors may be in for a good bargain as the price easing begins. We see that demand for investment will go up because investing in Real estate is the best hedge against inflation.

For first time buyers, there will never be a better time to invest now because of lower pricing, low interest rates, government incentives and etc.

Q2. It is observed that some developers will be facing strong headwinds ahead, especially those selling midrange products with low-profit margins. What are your thoughts on this?

Developers are facing tough times and the overhang is adding pressure to them. Nevertheless, many developers are taking measures to give incentives & discounts and all these are good for buyers who are looking for opportunities.

Q3. Some are in the opinion that buying directly from the developer is a better option. Can you please share your views?

It all depends on which perspective they come from.

From our perspective, the agents are appointed by developers to reach the consumer, market the product highlighting salient points, and help you to select the best units that meet your needs. They are independent as such they can do a lot more running for you.

The developers know their product well and are more familiar with the location of the development. Sometimes they also help the agents in selecting units for their customers. Most of the developers’ salespeople are housebound and can only do so much as they are mostly salaried. So they may not be able to do a lot more running for you or present different views on other products nearby.

The benefits you get will be the same as the prices and discounts are prefixed.

And now with the State and Federal Govt introducing the economic stimulus packages e.g. reintroducing HOC which received good response in 2019, RPGT exemption, we believe that it would be able to stimulate the property market.

For the secondary market, purchasers are assured that the properties are completed and may be handed over upon completion of sale. Owners are selling it at a competitive price as they are competing with developers.

PART 2: Common property pitfalls and preventive measures.

According to the latest announcement from the Ministry of Health, Mukim 12 of Penang’s Southwest District will be placed under a conditional movement control order (CMCO) from November 6 to November 19.

This will affect several townships within Mukim 12, namely Batu Maung, Bayan Baru, Bayan Lepas (including Free Industrial Zone), Sungai Ara, Sungai Nibong and Queensbay areas.

The rules under CMCO are as follows*:

• Only two members of a household may leave the house to buy necessities;
• All schools, higher education institutions, training institutes, kindergartens, childcare centres, public parks and recreational centres will be closed;
• Activities in the economic, industrial and trade sectors would be allowed to operate as usual, but the working hours may be limited;
• All forms of public transport such as buses, taxis and e-hailing services are allowed to operate from 6am to 12am;
• Daily markets are allowed to open from 6am to 2pm, while wholesale markets may operate from 4am to 2pm, and night markets 4pm to 10pm;
• Clinics and public hospitals will be allowed to open for 24 hours while pharmacies and medicine stores may operate from 8am to 11pm;
• Fishing, farming and the agriculture sectors may operate as usual; and
• All social gatherings, including weddings, and entertainment activities are not allowed.

*Based on information released earlier for CMCO at KL, Selangor and Putrajaya

Bank Negara Malaysia’s (BNM) Monetary Policy Committee (MPC) has decided to maintain the Overnight Policy Rate (OPR) at 1.75 per cent as the global economy continues to recover, led by improvements in manufacturing and export activity.

In a statement yesterday, the central bank said the OPR decision also came after the latest indicators in Malaysia pointed towards significant improvement in economic activity in the third quarter.

“The introduction of targeted measures to contain COVID-19 in several states could affect the momentum of the recovery in the fourth quarter.

“Nonetheless, growth for the year 2020 is expected to be within the earlier forecasted range,” it said.

For 2021, BNM said economic activity is projected to improve further, underpinned by the recovery in global demand, turnaround in public and private sector expenditure amid continued support from policy measures, as well as higher production from existing and new facilities.

Nevertheless, it noted that the pace of recovery would be uneven across sectors, with economic activity in some industries remaining below pre-pandemic levels, and a slower improvement in the labour market.

“Downside risks to the outlook remain, stemming mainly from ongoing uncertainties surrounding the pandemic globally and domestically,” it said.

On headline inflation, the central bank said in line with earlier assessments, the headline inflation is likely to average negative this year given the substantially lower global oil prices.
“For 2021, headline inflation is projected to average higher.

“The outlook, however, will continue to be significantly affected by global (crude) oil and commodity prices,” it said.

Underlying inflation is expected to remain subdued in 2021 amid continued spare capacity in the economy, it added.

On the external front, BNM said the latest indicators showed that economic activity picked up in most advanced and regional economies, with a more pronounced recovery momentum in China.

However, it noted that recent resurgences in COVID-19 cases have caused some major economies to re-introduce containment measures, although generally less restrictive than earlier measures.

“This suggests that the global economic recovery will likely remain uneven in the near term,” it added.

According to BNM, financial conditions have improved, although risk aversion remains elevated.

“The overall outlook remains subject to downside risks, primarily due to the risk of further resurgence of COVID-19 infections which could lead to weaker business, employment and income conditions,” it added.

Overall, the central bank said the MPC considered the stance of monetary policy to be appropriate and accommodative.

“The cumulative 125 basis points reduction in the OPR this year will continue to provide stimulus to the economy,” it said.

BNM said the MPC will continue to assess evolving conditions and their implications on the overall outlook for inflation and domestic growth, and the central bank remains committed to utilise its policy levers as appropriate to create enabling conditions for a sustainable economic recovery.

Meanwhile, the central bank said the meeting also approved the schedule of MPC meetings for 2021.

“In accordance with the Central Bank of Malaysia Act 2009, the MPC will convene six times during the year.

“The meetings will be held over two days, with the Monetary Policy Statement released at 3 pm on the second day of the MPC meeting,” it said.

Source: Bernama.com

The Penang government is now seeking public feedback on a replacement of the George Town World Heritage Site Special Area Plan, which is due for a review next year.

State Housing, Local Government, Town and Country Planning Committee chairman Jagdeep Singh Deo said the state was now in the midst of preparing the replacement Special Area Plan (SAP) for the heritage site.

“We are welcoming input from various parties as it is important for us to continue to move forward.

“It is a process of improving and upgrading the SAP for the heritage site for the betterment of the people.

“For instance, the replacement SAP will ensure a sustainable development of the heritage site.

“A committee will be formed to collect the proposals and suggestions from the public before incorporating some of them into the draft SAP.

“That’s why the feedback is important for us to come out with the draft SAP by April next year,” he said after attending the launching of the World Town Planning Day in Komtar today.

The George Town World Heritage Incorporated (GTWHI), which is the site manager, has begun the process of reviewing the SAP.

Jagdeep added that the SAP would be reviewed every five years. It was last gazetted in 2016 and is due for review in 2021.

PLANMalaysia Penang director Robi Desa said the draft SAP would be posted online for public viewing once it is finalised.

“We have no choice but to display it online during the current pandemic,” she said, pointing out that a consultant had been appointed for the draft replacement SAP.

The feedback could be made at http://jpbd.penang.gov.my.

Also present were Pengkalan Kota assemblyman Daniel Gooi, GTWHI general manager Dr Ang Ming Chee and Chief Minister Incorporated (CMI) deputy general manager S. Bharathi.

Source: Buletin Mutiara

About GEM Residences

GEM Residences, a commercial development by Belleview Group at Prai, Penang. It is part of the company’s 6 hectares mixed development along Jalan Baru, diagonally opposite Megamall Penang. Next to it will be the upcoming largest mall in the northern region – GEM Mall, the tenant mix include SOGO (first and largest departmental store in the northen region at 212,000 sq.ft.) and a supermarket (largest at 50,000 sq.ft.).

Find out more about GEM Residences