HOC will restart property market activities

Press Release by Knight Frank Malaysia: Reintroduction of Home Ownership Campaign to pave the way to housing market recovery 

13 July 2020, Malaysia – Knight Frank Malaysia launches the latest research report, Real Estate Highlights 1st Half of 2020 today, which highlights the property trends and outlook in key markets of Malaysia. 

The residential market showed signs that it had bottomed out late last year. However, the onset of the COVID-19 pandemic in 1Q2020 continues to bring much uncertainty and this has derailed the recovery momentum. With severe disruptions to the economy leading to rising unemployment, potential buyers and investors have delayed making big-ticket purchases. 

Sarkunan Subramaniam, Managing Director of Knight Frank Malaysia, said, “During the first half of the year, the central areas of Kuala Lumpur saw fewer residential project launches and lower level of transactional activity. Still, against this backdrop, we observed active bookings of rightly positioned residential products of reputable developers in city fringe and popular / upcoming suburbs. The reintroduction of the Home Ownership Campaign (HOC) featuring stamp duty exemptions and the uplifting of margin of financing limit for the third housing loan onwards for property valued at RM600,000 as well as Real Property Gains Tax (RPGT) exemption unveiled in the short-term Economic Recovery Plan (PENJANA) will help to simulate the property market. 

Alexel Chen, Executive Director of Knight Frank Sabah, said, “Meanwhile in Kota Kinabalu, we observed that some developers are now relooking into their products with a shift in focus to quality and well-priced residential products, both landed and high-rise at mature and growing residential areas. In Malaysia where the homeownership rate remains relatively high, there are still genuine homebuyers in the market awaiting for the right residential products.” 

Sarkunan added, “The central bank has cut the Overnight Policy Rate (OPR) thrice during the first half of the year with a further 25 basis points reduction to 1.75% last week, to help speed economic recovery. The lower monthly loan repayments coupled with the automatic loan moratorium for six months from 1 April will provide some financial relief to households amid the current crisis. Also, with lower monthly repayment sum, borrowers who failed to obtain a loan due to the restriction of one third Debt Service Ratio (DSR) rule, may now have higher chances of securing financing.” 

Outlook 

“The residential market is expected to see a slow uptick post-MCO, supported by various stimulus provided by the government, especially the reintroduction of the HOC featuring stamp duty exemptions and other incentives. Developers may also reconsider their product positioning and marketing strategies including leveraging on the technologies and partnering with e-commerce platforms to improve their sales moving forward”, Sarkunan concluded. 

END of Press Release —

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