KUCHING: Sarawak Housing and Real Estate Developers’ Association (Sheda) Kuching branch chairman Sim Kiang Chiok anticipates that housing prices in Sarawak will stabilise albeit slightly lower once the movement control order (MCO) is lifted.
“We had a few poor years prior to the MCO, and presently prices of properties have already adjusted downward with the Home Ownership Campaign (HOC) and very stringent bank financing for property,” he said.
He added that property overhang in Sarawak was stable and new launches were also low.
“In view of this and with the Covid-19 pandemic, after the MCO is lifted, we know that with the six-month bank moratorium and three-month wage subsidy which will help cash flow of the developer (supply) and keep jobs (demand), I foresee that the prices will stabilise with slight decrease to drive up interest,” he said.
He said that this was also subject to the banks’ appetite to give end-financing during the moratorium period.
He said after the six-month moratorium period, the prices of properties would depend on how well the economy restarts itself and the number of jobs lost and new ones created.
“If the loan defaults are low and not many forced sales after the six-month moratorium, property prices will be stable and with low discounts,” said Sim.
He added that housing prices in Sarawak following the current Covid-19 crisis would depend on how well the exit plan is executed after the MCO is lifted, and how quickly the economy can be revived until the end of the bank loan moratorium in September.
He said that there were various factors and past experiences to consider with regard to housing prices during and after the Covid-19 pandemic.
“We know that the currency crisis in 1998 was due to our banking and our country’s debts, while the credit crisis in 2008 was due to credit crunch. In this Covid-19 pandemic, the crisis is due to the world shutting down and having to restart after the major spread of the virus is over,” he said.
He pointed out that the current predicament was a different situation from previous world crises, and the banks were in a stronger position compared to before.
He said to understand the pricing of properties, particularly housing, numerous factors could be looked at but the most fundamental ones were supply, demand, bank financing, location, and type of properties for different income segments.
“Of course, every sector must play their part to ensure that the government’s stimulus packages are being implemented as quickly as possible and all prime economic activities will take off too,” he said.
He added that banks must be able to quickly assist Bank Negara to reduce the high standard of evaluation on giving out loans so that the much-needed special relief loan to small and medium enterprises (SMEs) can be released quickly to them.
This would ensure that businesses could operate and continue to provide employment.
