Monday, January 24

‘Urgent amendments to Covid-19 Act needed’

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The industry supply chain has been disrupted, and contractors are drawing the stocks from suppliers and as such, it is hopeful that the amendments to the Covid-19 Act can be gazetted in November. — Bernama photo

KUCHING: Urgent amendments to Covid-19 Act needed, RHB Investment Bank Bhd’s research team (RHB Research) gathers following a virtual meeting with the Real Estate and Housing Developers Association (REHDA) president Datuk Soam Heng Choon.

According to RHB Research in its real estate sector update, Soam indicated there was an urgency for the government to amend the Covid-19 Act (Act 829), so that a sufficient exclusion period can be granted.

“This comes in view of the inefficiencies and interruptions resulting from the lockdown this year,” the research firm said.

“The industry supply chain has been disrupted, and contractors are drawing the stocks from suppliers.

“The industry is hopeful that the amendments can be gazetted in November.”

RHB Research recapped Soam sharing that REHDA has made several proposals to the government that should help the property market recover.

The research firm noted that these included the Home Ownership Assistance Programme (HOAP), extension of the current real property gains tax (RPGT) waiver, removal of the loan-to-value (LTV) ratio, and reviewing the threshold for foreigners buying properties.

“While the HOAP is similar to the previous developers’ interest-bearing scheme, REHDA is advocating greater transparency and this scheme should only be available for properties priced below RM500,000.

“At the same time, industry players are also lobbying for the extension of the Home Ownership Campaign (HOC).

“If some of these proposals are accepted, we think it will help to expedite the recovery in the housing market and boost affordability for first-time home buyers.”

According to RHB Investment Bank, developers are turning more optimistic for the outlook in the first half of 2022 (1H22) as the country’s vaccination rate advances further.

It highlighted that property sales under the HOC grew by about 10 per cent year on year (y-o-y).

Based on the research firm’s checks with a few developers, while the property sales in third quarter of 2021 (3Q21) are expected to be softer quarter on quarter (q-o-q), most companies are on track to hit their sales targets by year-end.

“Indeed, certain projects with good locations and attractive designs were still well-received.

“For example, at an average selling price (ASP) of around RM1,000 per square foot (psf), Jendela Residences by Sime Darby Property was more than 80 per cent sold for Phase 1. Phase 2 is now 40 to 50 per cent sold.

“Soam attributed this to the accumulation of savings in the banking system, as well as better preparation by developers to weather through the lockdown this year.”

On whether the supply glut is still a drag for the property market, RHB Investment Bank gathered that according to Soam, the Ministry of Housing is currently working with other ministries and departments to develop a database to have a detailed study on the supply issue, so that the measures to address the overhang units can be better targeted.

The research firm noted that the database is expected to be ready next year.

Meanwhile, RHB Research also highlighted that during the virtual meeting, Soam also brought up the suggestion made by some consultants, whereby a two per cent transactional tax (one per cent buyer one per cent seller) can be considered by the government in order to raise tax revenue.

“While Soam thinks that this would be detrimental to the sector recovery, we also agree that the timing may be inappropriate as many sectors are still trying to recover or survive due to the impact of pandemic.

“Hence, policies to discourage buying and selling would be unwelcomed at this point.”