HOC may extend to secondary housing market too

 

The problem of overhang has been there since before the Covid-19 pandemic but the pandemic has only amplified the scenario, says Napic’s Ari Adam.

PETALING JAYA: The government may extend the Home Ownership Campaign (HOC) benefits to the secondary market, the National Property Information Centre (Napic) said.

It may also freeze the development of stratified buildings to resolve the overhang in the various segments of the property market.

The HOC benefits include substantial savings in stamp duty and tax exemption in housing loans.

Deputy director of Inventory at the National Property Information Centre (Napic) Ari Adam said extending the HOC to the secondary market will create a level playing field in the residential segment.

The HOC benefits are currently limited to developers’ units but the extension to the secondary market will see house owners benefit when they sell their houses.

The HOC is expected to end on Dec 31, 2021.

Ari said a freeze on stratified buildings may resolve the overhang in the residential and serviced apartment segment, and in the purpose-built office space and shopping malls while extending the HOC to the secondary market will help to spur residential sales.

He was speaking at the association of valuers, property managers, estate agents and property consultants in the private sector Malaysia (PEPS) 14th Malaysian Property Summit 2021.

Ari hinted that the Budget 2022 may also reveal some news with regards the extension and the possible freeze on stratified buildings.

He said the government and stakeholders need to “think out of the box” as the government is expecting a surge in stratified units – mainly serviced apartment units – as developers try to maximise profits when the economy takes ginger steps towards reopening.

Ari, who was in Johor before the pandemic to see the situation there, said the overall overhang situation in the country “is quite alarming and we have to think out of the box” about how to resolve it.

The unsold completed units – overhang, in property parlance – in residential, serviced apartments and small office home offices (SoHos) totalled 57,154 units, with a ringgit value of RM41.54bil at the first half of 2021.

Ari said the issue of overhang has been there since before the Covid-19 pandemic but the pandemic “only amplified the scenario.”

“As I usually say, data speaks for itself. The question is: What do we do with overhang? Do we let prices come down?

“Perhaps if we had (made it mandatory) for developers (to have independent feasibility and market studies), there may be no overhang. Perhaps if developers consider what the people want or can afford,” Ari asked.

As for office and mall space, Ari said Malaysia has never seen such low occupancy rates for both which is about 70% as today.

“This is the lowest ever. I don’t know if it will get worse or better. We have to find ways to occupy all the space we have. There were ideas about making them into small office centres, data centres or starter homes,” Ari said. - FMT