Malaysia had already faced many crises in the past, and the property market always managed to bounce back. Impetus Alliance CEO and Managing Director Datuk Seri Michael Yam attributed this to the resilience of the government and the people as well as the private and corporate sectors.
In fact, property developers in Malaysia are now well-prepared to face the economic impact of Covid-19 than they are during the 2008 financial crisis.
This comes as many of their development projects are financed via equity financing instead of bank borrowings, while some developers had entered into joint-ventures with landowners to undertake projects.
“So, on that basis, exposure to gearing is much more manageable. I would think this time around, we will be better prepared,” said Hartamas Real Estate Group Founder and Group Managing Director Eric Lim.
He expects the property sector to rebound in the fourth quarter of 2020, before normalising by early 2021, reported Bernama.
He noted that some even believe that the property market will surge by 2021.
“So, the banks’ six-month moratorium is a relief both to the individuals and corporations…This will cushion the (COVID-19) impact at least for the next six to nine months and probably until the end of the year,” he said during a webinar on the multi-sector market outlook.
Meanwhile, Axis REIT Managers Bhd Non-executive Director Stephan Tew called on the government to reduce the real property gains tax (RPGT) in order to encourage Malaysians to buy or sell properties.
The government imposed a 5% RPGT to Malaysians selling their property after the fifth year under Budget 2019, while an RPGT of up to 30% is imposed to those who sold their property in three years or less.
In Budget 2020, the RPGT charged on the sale of properties after five years was revised by setting the market value on 1 January 2013 as the property’s acquisition price for those acquired prior to said date, compared to the present base year of 1 January 2000.