M’sian property sales to remain challenging without NHOC

KUALA LUMPUR: Without the support from the National Home Ownership Campaign (NHOC), analysts expect Malaysian property sales to likely remain challenging.

From the research arm of Maybank Investment Bank Bhd’s (Maybank IB Research) channel checks, the Home Ownership Campaign (HOC) incentives are not extended into 2020 for now except for those sales and purchase agreements (SPAs) that were signed in December 2019 and are stamped before endJanuary 2020.

Maybank IB Research recapped that HOC was re-introduced in Budget 2019 to help lower the country’s unsold property stocks.

“According to the Housing and Local Government Minister Zuraida Kamaruddin, property sales transacted under the NHOC 2019 were RM19.8 billion as of December 2019, surpassing its initial target of RM17 billion,” the research arm said.

“Amid a challenging global environment and slowing economy, Malaysian property sales are likely to remain challenging without the support from NHOC.”

Given the challenging property market outlook, Maybank IB Research expected developers to continue to offer attractive marketing packages such as discounts or rebates and freebies such as free renovation packages, free kitchen cabinets or airconditioners, electrical appliances, and others to clear unsold stocks or entice buyers.

Hence, the research arm expected further blended margin erosion as competition continues to rise.

“Also, margins are coming under pressure due to their higher involvement in the affordable housing segment (below RM500,000 per unit; the current demand trend).”