KUALA LUMPUR: With just a few months of the year remaining, all eyes are on whether the nationwide Home Ownership Campaign (HOC) will get extended into 2022.
The campaign, which ends on Dec 31, has helped developers mitigate the impact of the pandemic.
Kenanga Research, in a recent report, pointed out that property sales by developers have been good.
“Despite the unexpected full movement control order imposed in June, we note that all developers under our coverage are still in line to meet their internal sales target set out at the start of the year, with the exception of Malaysian Resources Corp Bhd.
“EcoWorld Development Group Bhd and Sunway Bhd had already surpassed their initial sales guidance.”
Nevertheless, Kenanga Research said the real test will be when the HOC ends at the end of this year.
“Unless the HOC gets extended again, stamp duties (on memorandum of transfer and loan agreements) which are currently waived will kick in,” it said.
The research house added that for properties valued at RM300,000 to RM1mil, the duties would add on an additional cost of 2.1% to 2.9% (or RM6,350 to RM28,500) in cash. “Taking a cue from the car sales trend that came off substantially post the goods and services tax holiday from June 2018 to August 2018, we believe most home buyers would likely seize the opportunity to purchase properties by year-end and property sales would likely come off next year.”
The HOC was kicked off in January 2019 to address the overhang problem in the country.
The campaign, which was intended for six months, was extended for a year.
It proved successful, having generated sales totalling RM23.2bil in 2019, surpassing the government’s initial target of RM17bil.
The government reintroduced the HOC in June last year under the Penjana initiative to boost the property market after it was adversely affected by the Covid-19 pandemic.
The campaign was extended to the end of this year, with property consultants and developers fully supporting the move.
In March this year, during the Real Estate and Housing Developers’ Association’s briefing on the property market for 2021, its president Datuk Soam Heng Choon revealed that since the HOC was reintroduced last June, a total of 34,354 residential units valued at RM25.65bil had been sold as at Feb 28, 2021.
Separately, Kenanga Research said year-to-date property development margins have been stable.
“This is attributable to cost controls and efforts to pivot into digital marketing, which substantially cut sales and marketing costs, while sales remained healthy.”
According to the National Property Information Centre (Napic), there were 92,017 property transactions worth RM34.51bil recorded during the first half of 2021.
This represented a year-on-year increase of 22.2% in volume and 34.7% in value.
“Performance across the states improved in the review period. All states recorded higher market volume except for Putrajaya. The four major states, namely Kuala Lumpur, Selangor, Johor and Penang, formed about 50% of the total national residential volume,” Napic said.
In the primary market, Napic said there were 16,660 units launched, down by 34% against 25,227 units in the first half of 2020.
“Against the second half of 2020, the new launches were lower by 24.1%,” said Napic.
It added that sales performance in the first half of 2021 stood at 24.7%, surpassing the 12.9% recorded in the previous corresponding period.
“The improvement in sales performance can be attributed to the various measures by the government such as incentives under the HOC and low interest rate.”
By property type, Napic said terraced houses dominated new launches in the first half of this year.
“Single-storey (2,624 units) and two and three-storey (5,455) units together contributed 48.5% of the total units, followed by condominium/apartment units at 41.4% share (6,893 units).”