THE government-backed Home Ownership Campaign (HOC), which has been successful in boosting sales and offering incentives, could be extended to further mop the massive unsold properties in the country.
The campaign, which started this year and offered a lot of incentives and discounts, has been successful in encouraging consumers to purchase houses. Most developers have also reported brisk sales after a few years of disappointing results.
CBRE-WTW (CBRE Group Inc and CH Williams Talhar & Wong Sdn Bhd) MD Foo Gee Jen said there are already talks in the industry of a possible extension to the campaign after it was extended till the end of this year.
“Yes, it is possible for the HOC to be extended as developers are already lobbying for this,” he told The Malaysian Reserve.
But Foo said despite some signs of success of the campaign, the property sector must find its own “equilibrium”.
“I believe the market has to find its own equilibrium and take the natural process and do its own correction. Let the market forces determine the price buyers wish to buy. Do not artificially mark up the price and then offer discounts, rebates or freebies,” he said.
Foo said the market is already speculating a three-month extension until March 2020.
Asiacap Valuer & Property Consultants Sdn Bhd property valuer Kit Au Yong said there is a strong possibility that the campaign will see further extension based on the current feedback.
“The current campaign has gained good responses from the market. It may be a good opportunity to help homebuyers to own a home with such incentives,” he said.
Many property developers have posted better revenues for the January through June period this year, contributed by the HOC.
Sime Darby Property Bhd said the HOC contributed half of its RM1.4 billion sales in the first half of 2019 (1H19).
The developer’s projects which are registered under the HOC include Kuala Lumpur East’s The Ridge and Serini Melawati.
Sime Darby Property chief marketing and sales officer Gerard Yuen said the company saw a spike in sign-ups at the end of June, before the government announced the extension of the HOC. He expects to see a spike in take-ups again in December before the campaign ends.
Paramount Corp Bhd’s projects registered under the HOC contributed about 70% of the RM310 million total sales in 1H19.
Paramount Property Development Sdn Bhd CEO Beh Chun Chong said the majority sales were from its projects in the northern region — including Bukit Banyan in Sungai Petani, Kedah, and Utropolis Batu Kawan in Penang — which together contributed RM150 million in sales.
Paramount Property’s projects in the central region which are registered under the HOC include Greenwoods in Salak Tinggi, Sejati Residences in Cyberjaya and Atwater in Petaling Jaya, among others.
MRCB Land Sdn Bhd’s Alstonia Hilltop Homes in Bukit Rahman Putra also saw an increase of interest since the HOC.
MRCB Land CEO Raymond Cheah said Alstonia saw about a fivefold increase in terms of bookings and sales, while certain projects saw about 20 times increase in interests.
Knight Frank Malaysia Sdn Bhd Sarkunan Subramaniam said it is up to the developers to continue offering discounts to buyers.
“Whether the HOC is extended or not, developers can individually carry on the discounts they want to offer to the buyers,” he said.
But PPC International Sdn Bhd MD Datuk Siders Sittampalam said the government and developers might not see the same results even if the campaign period is lengthened until next year.
“They are not going to see the same level of interest as genuine buyers could have bought what they wanted,” he said.
Malaysia’s property market has been in the doldrums with RM37.23 billion of unsold homes including RM19.96 billion for residential and RM10.18 billion for serviced residents at the end of the first quarter this year, according to government’s figures.
Developers are also scurrying to clear their old stocks and take them off their books while they plan new projects