Difficult to forecast due to policy change
Published on: Monday, March 25, 2019
By: Larry Ralon
PENAMPANG: Sabah Housing and Real Estate Developers Association (Shareda) Secretary-General Ronnie Ang Guo Wei said this year is very difficult to forecast due to changes and adjustment of policies by the new Pakatan Harapan (PH) government.
These changes have disrupted the timeline for mega projects implementation irrespective the decisions were made aptly for debt reduction purpose by the government.
ADVERTISEMENT
“Across the board, business owners are tightening up the spending or expansion of business activities with an attitude to wait and see of the transformation of economic situation,” he said in association newly released Property Development Annual Report and Market Outlook 2019.
The Malaysian Budget 2019 proposals aimed at increasing taxes for property transactions especially on 5pc Real Property Gains Tax (RPGT) will further slowdown the already sluggish market, he said, adding investors and property owners are largely slammed with the 5pc tax as it did not have any expiry year.
All potential buyers will now have to take into account the 5pc tax as part of the purchasing cost, he added.
According to him, the oversupply of properties mainly on shopping centres and high-end condominiums was confined to few areas in West Malaysia but in general, there are no high supply particularly for Sabah as a whole.
ADVERTISEMENT
“This could be due to large volume of high density projects having been approved in some parts of Malaysia in the past few years. On the contrary, Sabah developers are very cautious about market conditions due to limited population.
“Sabah projects are abided by controlled density policy whereby provision of large setback is required and hence the proposed density of development is reduced. Profit wise is not lucrative as it is capped at 30pc profit under the policy by the Housing Controller,” he said.
ADVERTISEMENT
With the recent Home Ownership Campaign (HOC) from January 1 to June 30 this year that jointly organised by the government and Rehda, Shareda and Sheda at national level and National Affordable Housing Policy implemented recently aimed at providing potential house owners access to at affordable prices, he said house buyers would now have the opportunity to seize the property at competitive price.
He said both government and developers are working together to provide huge savings from Stamp Duty exemption to minimum 10pc discount, respectively, to address the overhang of housing stock in the country.
“Low-medium cost properties will still be in demand but the potential buyers will face financing problems under the present lending policy. Medium-cost properties will probably do better in Kota Kinabalu area due to the financial standing of the buyers.
“Sabah has never short of lower priced housing, but most of the buyers could not get loans due to low salary level and other forms of spending. It is prudent to expect some new guidelines on end financing will be introduced this year,” he said.
Ang said tourism in Sabah in 2019 will continue to do well due to increase connectivity of air flights among Asean countries like China and Korea.
Lately serviced apartments and suites and hotels have taken over the scene of newly launch projects in Kota Kinabalu, he said, adding that Shareda is looking forward to the new formation of By-laws on Short-Let Stay to be formulated by the Kota Kinabalu City Hall (DBKK) and strata management by-law by the State Government to govern the issues of business licensing for the operators and safety for the guests as well as strata living in harmony under joint committee of management corporation.
“Generally, in the whole of 2019, it is expected some foreign investment and announcements of major contracts and mega projects to take place due to more political stability.
“Public would expect further announcements on the implementation of some of the Budget 2019 proposals such as P2P, Rent-To-Own, etc. Towards the end of this year, the investment and potential property market will be clearer as most of the new measures would have been announced and implemented,” he said.
Beside Chew and Ang, all other holders of Shareda top posts including the council members also retained their respective post uncontested.
Stay up-to-date by following Daily Express’s Telegram channel.
Daily Express Malaysia
