GEORGE TOWN, May 1 ― The Malaysian chapter of an international real estate federation does not foresee a property market crash due to the coronavirus disease (Covid-19) pandemic that has crippled the global economy.
FIABCI Malaysia president Michael Geh believed the local property sector will remain resilient due to the various measures introduced by the government in its economic stimulus package.
“Post Covid-19, I foresee the property market will have just a soft landing because of the economic stimulus measures by the government,” he said.
He said the property sector was buoyant and healthy in 2019, recording an estimated transactions of 330,703 units valued at an estimated RM139.33 billion.
However, he admitted that the capital and rental value of some properties will soften due to the pandemic.
“This does not herald a property market crash as feared,” he stressed.
Geh said the hospitality sector will bear the brunt of the economic downturn in the short term.
“The capital and rental value of office lots, shopping mall lots and commercial lots will also soften as there was already existing overhang of these lots from last year,” he said.
However, he said malls, retail and commercial lots located in prime areas or next to an MRT stations will still continue to do well.
“Properties in prime areas will continue to command good capital and rental value,” he said.
Geh is certain that the capital value of terrace houses and residential properties valued less than RM500,000 will be maintained.
“High-end residential properties in desirable locations will have to sit in for these six months,” he said.
He added that the sectors that are thriving now will be the warehousing and logistics sectors due to an increase in online shopping.
Geh noted that there are still a lot of surplus properties including those priced below RM500,000.
“I find that most of these overhang properties are located in undesirable locations such as in places without public transportation or connectivity and far from other amenities and work places,” he said.
He said these are the same overhang properties from last year that were located in secluded places lacking connectivity and amenities.
The government's move to introduce a six-month moratorium on housing and car financing would ensure that there will not be any property foreclosures for the next six months, he said.
“This will allow those who are facing financial problems or who have lost their jobs to still have a roof over their heads,” he said.
Geh added that the additional stimulus package announced by the government for the SMEs is another welcomed move that will help people to retain their jobs and SMEs to survive during this pandemic.
As for the Penang state government's proposed action plan to spur the property sector, Geh said it should include measures that can stimulate the market.
“Last year, the housing and finance ministries managed to spur the industry with the home ownership campaign so if the state introduces measures to help house buyers, it will similarly be good for the sector,” he said.
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