Property Market Down But Not Out Says Expert

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Like the rest of the economy, the property market has been struggling in the face of the Covid-19 pandemic.PETALING JAYA: The property market may be in the doldrums, but an industry expert foresees a boom once a vaccine against Covid-19 is found
This would be largely due to pent-up demand, said Rahim & Co International CEO Siva Shanker, a former president of the Malaysian Institute of Estate Agents
“The property market is like a big wheel,” he said. “Once it slows down, it is tough to turn it again. But when it does turn, it will move by itself.”Even now, he told FMT, the cash-rich would be on the lookout for good deals and there would be property owners wishing to sell
“We agents will try to facilitate the meeting point for market forces, and each round of sales will act as a catalyst for the next round. This in essence is the property cycle.”But Siva said there was no data to help anyone tell how badly the Covid-19 crisis and the movement control order had affected the sector
Commenting on an FMT report that a number of hotels were being put up for sale, he said some hotels were in a dire state even before Covid-19 came into the picture. The virus only expedited the inevitable, he added
“We must remember that in 2018 and 2019, the property market did well compared to the years before and we saw some growth for the first time in a few years,” he said
“Transactions will drop for sure. By how much, no one knows. But I believe the Malaysian economy can get through this, and the property industry will follow suit albeit at a slower pace since property is a big ticket item.”But when a Covid-19 vaccine is found, he added, one could expect the pace to accelerate
He said growth in the property industry was likely to come from real estate investment trust (Reit) companies because these are seen as a stable vehicle for property investments
“With Reits, you won’t get spectacular returns in a short period of time, but it means there is less speculation and unpredictability. That is the kind of growth that is good for the industry and everyone else.”He urged Bank Negara Malaysia to look into extending the six-month loan moratorium for another half a year to give struggling businesses and individuals enough time to get back on their feet
“We should also continue with a home ownership campaign so people will know that for the next 18 months, there are incentives to buy properties,” he said
Henry Butcher chief operating officer Tang Chee Meng said the commercial and office property sector would be especially affected by the slowdown in the retail and tourism sectors and the oversupply of office space
He said the completion of a number of massive office developments, like Merdeka PNB 118, would put pressure on occupancy and rental rates
“It will take a while before things get back to normal,” he told FMT, adding that owners of malls and office blocks would have to look for ways to hold on to current tenants and attract new ones
“The government should take measures that can boost the economy as this is the only way to increase demand for office space as well as consumer spending.”
He suggested that Putrajaya introduce incentives to attract multinational corporations to set up regional offices in the country to help boost demand for office space. - FMT

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