Demand for houses continues to remain strong despite the challenges posed by the Covid-19 pandemic.
Sarawak Housing and Real Estate Developers’ Association (Sheda) Kuching branch chairman Datuk Sim Kiang Chiok said the pandemic has posed numerous challenges to the development and construction sector.
However, despite the challenges, overall demand for houses continues to be strong and it is prime time to purchase properties given the current low interest rate.
“If you have a steady job from a stable employer and good credit score, now is the best time to buy a property. With so many incentives and super low interest rates, this may be a once in a lifetime opportunity,” said Sim.
He said this during an exclusive interview with New Sarawak Tribune and its sister paper Suara Sarawak recently. Following is part of the interaction.
NST: What is the current demand for houses in Sarawak?
SIM: The overall demand for houses is always strong because it is a basic need. I would say that strata title is getting popular in the prime areas and there are more strata properties than landed properties in the market. These properties are being widely accepted by the millennial and pensioners.
In Kuching, the prime areas for residency and commercial for the south area is located along Jalan Song and its surrounding areas towards Samajaya and Samarahan. Batu Kawa is also picking up as a preferred area given the remarkable work being done by the Local Government and Housing Minister, who is also Batu Kawa assemblyman Datuk Seri Dr Sim Kui Hian. While in the north, the prime areas are located at Matang Jaya and Kuching North City Commission (DBKU) area. As for the east, the Darul Hana development is having much interest from potential property buyers.
I would also like to point out that Samarahan is becoming one of the fastest growing areas given several universities and colleges within the proximity.
What is the progress for the Home Ownership Campaign (HOC)?
We are upbeat with the HOC campaign and it is showing a better result than initially thought. In fact, Kuching-Samarahan has certified over 550 units in the last six months as compared to over 460 units in the same period in 2019.
The federal government through its National Economic Recovery Plan (Penjana) has waived stamp duties while developers are giving at least ten percent off from the approved selling price.
During the HOC period, which is until the middle of this year, the real property gains tax (RPGT) is also waived. I hope the government will extend this lifeline until the end of the pandemic or when we have attained 80 percent vaccination to achieve herd immunity.
There are many properties that are selling like hotcakes. Do you think this indicates that Sarawak is economically stable or is the market being manipulated by the T20 group?
It could be because of both factors. Properties that are in good location and with all the amenities like school, hospital, parks, shopping mall and so on will naturally have good demand from genuine property buyers and investors from the T20 earners.
The T20 earners will want to shift their cash investment from the banks because of the low interest rate. Properties that are let out as rentals can fetch good rental income and appreciation when the economy is restored and on a growth path again.
We have pent up demand due to poor supply that was caused by difficulties in getting housing loans before the Covid-19 pandemic. The demand is good if house purchase financing is easier to get from the banks.
How did the Covid-19 pandemic affect the state’s housing and real estate?
The Covid-19 pandemic has caused much destruction, interfered, slowed and stopped much economic activities especially during the first lockdown and movement control order (MCO). The borders continue to be closed so our travel, tourism and hotel sectors which constitute about 17.5 percent of our gross domestic product (GDP) during the pre-pandemic are heavily affected.
In the development and construction sector, we were unable to open our showroom and construction sites had to be closed. This is similar for law firms as well as land and survey offices. Even though banks were open but they were not running at full capacity so sales could not be conducted.
Nonetheless, it was good to see sundry supermarkets, online businesses, logistics and food delivery services booming.
What are some of the challenges faced by the developers during the pandemic?
We were worried about our overheads, fixed running cost, bank loans to pay, utilities bills, salaries and construction cost among others. Simultaneously, we were also cracking our heads on how we were going to resume our work. Thankfully with the standard operating procedures (SOPs), we are able to resume.
However, extra cost and time are now needed in the new normal as we have to do frequent sanitisation of office and work sites, take temperature readings, use of hand sanitiser and reduce our workforce due to the social distancing guidelines. The MySejahtera application helps us with monitoring and recording of physical movements.
Our workers are complying with the SOPs well. The use of face masks is not something new because even before the Covid-19 pandemic, they would wear face masks when dealing with dusty areas or works.
Have the federal and state governments provided sufficient assistance to the developers?
When the pandemic struck, the first main concern was where to find the income to pay wages, bank loans and utilities when our income was affected with no sales or rental collections. Thankfully the government reacted with very good assistance such as cash handout, wage subsidies and the six-month bank moratorium under the Prihatin Rakyat Economic Stimulus Package (Prihatin) scheme.
Meanwhile, the Sarawak government came to our assistance with Sarawakku Sayang Special Assistance (BKSS) with cash handout, reduced utility bills as well as assessment bills being reduced and deferred.
The assistances were timely as it had helped us to pull through MCO 1.0. Now that we are in MCO 2.0 but with less severe lockdown, we have further wage subsidies with Penjana and reduced bank repayment since September last year.
However, businesses are still unstable because we are still facing several spikes in the number of Covid-19 cases which is more concerning when compared to the initial lockdown in March last year. Several businesses, manufacturing and service associations are still asking for assistance in wage subsidies and bank loan moratorium to help them from failing due to the lockdowns to contain the spikes of infection.
The government has yet to respond but hopefully we may get some assistance perhaps in the middle of this month as announced by our Prime Minister Tan Sri Muhyiddin Yassin when he laid out our vaccination plan last month.
Moreover, the Sarawak government has started the Sarawak Economic Action Council (SEAC) in which they engaged with consultants and stakeholders to list out the action plans and strategies. There is a common goal of getting out of this pandemic to enable the economy to grow.
We are also grateful that the government has given us an extension of time without penalties to make up for the progress lost during the lockdowns and MCO. This is important because we cannot force our workers to work very fast, this would mean more workers will be needed. It does not mean that the two to three months lockdown, you want to catch up so you double the workforce. So, we give them a reasonable pace based on the number of workers available.
What are your hopes from the government for 2021 economic plans?
We hope that there will be an exit plan with a road map to get out of this pandemic. At the moment, we have to piece the information ourselves as there is no exit plan or a road map. It would be good if there is a single exit plan that all of us can work together on.
The government can help us by showing us the exit plan and road map with the vaccination programme in progress. For example, in the United Kingdom (UK), their vaccination programme is hitting 30 percent but they continue with wage subsidies until September this year with assistance to businesses like reopening grants and so on.
We hope that by the middle of this month, our federal government will come up with something similar to assist our nation’s economy and businesses.
