PETALING JAYA: Property developers are set to record robust sales in the final quarter of 2021, backed by the pent-up demand post-lockdown and house buyers capitalising on the remaining months of the nationwide Home Ownership Campaign (HOC).
Savills Malaysia Sdn Bhd group managing director Datuk Paul Khong said he expects developers to continue to leverage on the HOC to drive sales.
“Moving into the fourth quarter of 2021 and as the year closes, we expect to see a pick-up in transactions and last-minute deals before the HOC ends on Dec 31,” he told StarBiz.A property analyst concurred, believing that many potential home buyers will want to make the best of “what little time is left”.
“In Budget 2022 last month, expectations were high that the HOC would be extended into next year.
As the year closes, we expect to see a pick-up in transactions and last-minute deals before the HOC ends on Dec 31. - Datuk Paul Khong
“If that had happened, many home buyers would have held back purchases until next year, because of the added time.
“But there was no extension announced. With around a month-and-a-half of the year left, we expect home buyers to make the best of what little time is left to enjoy the final discount packages from developers and incentives under the HOC.”
UOB Kay Hian in a recent report said it expects strong property sales in the final quarter of 2021.
“While developers’ property sales in the third quarter of 2021 could be weak amid the lockdown, we expect it to be more resilient this time compared with the lockdown during the second quarter of 2020, thanks to ongoing digitalisation efforts.
“This was evident with a higher mortgage application and approval value in the third quarter of 2021 at RM67.5bil and RM24bil, respectively, following a good uptick in September 2021.”
Meanwhile, KGV International Property Consultants (M) Sdn Bhd director Samuel Tan (pic below) said the property market in Johor would depend vastly on the opening of international borders. “This will spur organic growth, which will impact the property market favourably,” he said.
KGV International Samuel Tan
Additionally, UOB Kay Hian said property sales in the fourth quarter of 2021 are expected to rebound strongly with the economic reopening-induced pent-up demand.
“We expect some developers like S P Setia Bhd, Eco World Development Group Bhd and Sunway Bhd to exceed their full-year sales target amid good booking momentum.
“This should see higher earnings spillover into 2022, given the recovery in construction activities.”
Earlier this week, Sime Darby Property Bhd announced that it had successfully achieved 100% take-up rates for its recently launched Dayana Phase 2 and Serenia Aiora Phase 1 homes.
The group said a key contributor to its recent string of successes was the in-house developed Online Booking System, a virtual platform that allows home buyers to book their preferred units from any part of the world, without having to leave the comfort of their homes.
An analyst from a local bank-backed brokerage pointed out that many developers had learned to restrategise and adapt to the pandemic, following a challenging 2020.
“Many have stuck to what has worked best for them. Digitalisation became a big part of their marketing strategies and it has borne fruit.”
Another property analyst said many developers have been focusing on affordable homes, a strategy that had proven to be successful.
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“The HOC has also played a big part in spurring the market,” he said, adding that the overall positive sentiment can be reflected in the performance of the KL Property Index over the past 12 months.
On a one-year basis, the KL Property Index – which is made up of listed shares of property companies – has risen more than 19%, thus reflecting the resilience of the local property industry. Comparatively, the benchmark FBM KLCI has dropped 4% over the same period.
The government kicked-off the HOC in January 2019 to address the overhang situation in the country. The campaign, which was intended for six months, was extended for a year.
It generated sales totalling RM23.2bil in 2019, surpassing the government’s initial target of RM17bil.
The government then 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.
According to Real Estate and Housing Developers’ Association (Rehda) deputy president Datuk N K Tong, as of Sept 30, a total of 73,503 residential units valued at RM47.38bil (after discounts) had been sold since the HOC was reintroduced last year. Discounts worth more than RM9bil were given to buyers during the period.
At a briefing last month, Rehda president Datuk Soam Heng Choon also urged the government to consider extending the HOC into 2022, as the campaign had been disrupted for over four months this year as a result of the prolonged nationwide lockdown.