PETALING JAYA,Jan 15: The property market, which has been dealt a double blow with the movement control order and proclamation of emergency, is unlikely to recover as quickly as first predicted, a real estate expert said.
He also believes the market has no choice but to “hope for the best and wait it out”.
Before this, PropertyGuru had said that housing trends towards the end of 2020 indicated that 2021 would be a year of gradual recovery for the market.
“The situation is likely to improve significantly in the second half of 2021,” it said. “Especially with the promise of a vaccine on the horizon.”
However, with the back-to-back announcement this week, Henry Butcher Malaysia chief operating officer Tang Chee Meng estimates that recovery may not happen until next year.
“Restricted movement will result in sales loss,” he said. “More importantly, the sudden nationwide emergency has shaken investors’ confidence.”
He pointed to the hit taken by the Kuala Lumpur Composite Index and the ringgit as examples.
Tang said most of the property market will be significantly affected, with the exception of the industrial segment.
“People still need a roof over their heads whatever the economic circumstances,” he said. “But, in the pandemic, may hold people back from committing to big ticket items like houses.”
He also said that government initiatives such as the House Ownership Campaign (HOC) 2.0 may take a backseat until movement is no longer restricted.
“Only then will developers be able to actively make use of the HOC to market their projects and to take advantage of the low interest rates to attract buyers.”
Economist Carmelo Ferlito told FMT he doubted any government initiative could force demand to meet supply in the pandemic.
“I don’t see why the government should fix industry problems that are not policy-driven,” he said. “It would be different if troubles were caused by the government itself.”
Ferlito said the problems plaguing the property market have been around far longer than Covid-19.
“The property boom ended in 2013 and the market has been in decline ever since,” he said. adding that the trend may last a few years more.
“The second half of 2020 in the market tended towards stabilisation, with stable or moderately declining prices. And I still foresee a stable pattern, even in the event of a post-MCO rebound.”
He said the MCO could further drag down transactions, but it will very much depend on the duration. “We will not see a sharp decline in housing prices, but prices will likely remain in decline.”