With Penang’s international travel and vacations put on hold, people can now consider relocating from cities to suburbs with bigger houses.
“Properties launched in Penang are not as many as in Klang Valley, and some developers here had put their launches on hold since January this year or some since last year,” Iconic Worldwide Bhd Managing Director Dato’ Tan Kean Tet told The New Straits Times.
“Lesser launches result in reduced competition – this will somewhat help to cushion the impact for a while.”
He noted that even if property prices go soft, particularly those on the high-end, the market will not witness a large decline such as those registered during previous housing crashes.
And while the overall property sector reported a decline in property transactions due to the government’s movement control order (MCO), which caused property prices to stagnate, Tan remains optimistic of a post-pandemic recovery.
This comes as the property sector “has remained active throughout turbulent economic times in the past”.
He also pointed to the measures introduced by Bank Negara Malaysia to lower interest rate, which will help lower monthly commitment and instalments of borrowers and provide extra cash flow for investment.
“According to some local industry experts as well as our own deductions, we believe that the property sector in Malaysia will be modest towards the end of 2020 and potentially see a gradual recovery by 2021.”
When asked on how developers can survive the side effects of the Covid-19 crisis, Tan said developers should be creative in their offerings by bundling their property with various packages or by offering value for money products, reported The New Straits Times.
“It is hard to reduce prices for the existing property products as it is not fair for the ones that have purchased previously,” he explained.
“However, for new products, prices need to be more competitive. A lower margin is unavoidable. Additional assistance from the government and Bank Negara will be required, such as special interest rates for housing loans and higher approval loan rate.”
Commenting on the company’s cash reserves, Tan shared that Iconic Worldwide has enough cash reserves to sustain until the end of the year.
“We have also sold off all units in our project, thus we do not have any financial issues that will incur from our property development. This will allow us to explore other potential businesses and development opportunities.”
He revealed that the company has also sold off all units at Iconic Point, its maiden property project, back in September 2019.
“We are currently not facing any unit overhang issue.”
The company’s flagship project in Penang, Iconic Point is a mixed development project at Simpang Ampat, Seberang Perai, with a gross development value of around RM127.81 million.
Featuring 49 units of semi-detached and detached shop offices, the project is set to be completed and handed over by end-2021.