Property expo on despite poor sales
Published on: Tuesday, October 13, 2015
Kota Kinabalu: The Sabah Housing and Real Estate Developers Association (Shareda) said it will go on with its annual property exposition, Propex, despite sluggish property sales and "unfavourable" market conditions. Propex organising chairperson cum Shareda council member Ronnie Ang on Monday said the "show must go on" after he noted the total units on sale is about 6,000 units fewer than last year's Propex. He attributed this to the "unfavourable" conditions caused by policies imposed on the property sector such as the higher Real Estate Property Gain Tax and the Goods and Services Tax.
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Also, the stricter housing loan approvals as Bank Negara raised borrowing requirements to mitigate the rising national household debt, he pointed out. The latest ruling includes the directive from the Local Government and Housing Ministry which requires developers to slash 10 per cent off the intended selling prices of their housing developments, Ang added. Ties between Shareda and the ministry have become strained after the association challenged the new ruling on Oct 7, arguing the move will cut the profit margin of developers lower than the present 30 per cent cap. This is not the first time Shareda has opposed government policies, as it was also against the Cabotage Policy in the past.
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Towards this end, Ang noted developers have become demoralised and withdrawn from the event, saying the total units on sale has dropped from 16,930 units last year to 10,148 units. "The value also dropped from RM7.06 billion to RM5.17 billion this year," he told reporters at a press conference on Propex, here. Ang further said as a result of these rulings, the confidence of developers in Sabah now is at a low point and many were reluctant to carry out property launches because they were not able to determine the selling prices of their properties due to changes in the policies.
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Propex is scheduled to be held this Oct 23-25 at the Sabah Trade Centre with the Chief Minister Datuk Seri Musa Aman expected to launch the event. And this year, they have also decided to do away with the Shareda Night dinner and instead opted to hold a closing ceremony on the final day of the expo. Various other activities have been planned for the event including talks and lucky draw events. This year, 48 exhibitors ranging from various property segments to telecommunication companies will take up a total of 65 booths. However, Ang anticipated a lower sales volume this year, saying sales could probably only touch around RM1 billion. Shareda sales have already been on the downtrend since last year, after generating around RM3 billion from RM7 billion in 2013, he pointed out. On another development, Shareda Deputy President Chew Shang Hai ?said Shareda Council members may soon convene an extraordinary meeting to decide the next course of action over the 10 per cent discount ruling set by the Ministry. They had already threatened to take the ministry to court if the 10 per cent discount ruling is maintained when developers apply for development permits and their advertisement licence. Chew said Shareda President Datuk Francis Goh is currently out of town and will meet Minister Datuk Hajiji Noor as soon as he returns. Hajiji had earlier confirmed being fully aware of the new ruling, citing the rationale behind the discount is to reduce the prices of homes the prices of which have become increasingly difficult for people to own houses. "In Sabah house prices are determined by the developers and not market forces and that is why houses in Kuching which is also in East Malaysia house prices are cheaper." "Please don't give excuses as you have been collecting management fees from apartment owners every month in the meantime," he said. Goh had earlier said the ministry should not control the market and instead allow the property market forces to determine by itself. He had also argued that developers are making less than the 30 per cent profit margin mark and developers were only making profits of around six per cent per annum over a spread of five to six years, due to the slow approval of Development Plans. Stay up-to-date by following Daily Express’s Telegram channel.
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