Developers and Buyers Praise the HOC

KUALA LUMPUR: With only a few months out of the year, all eyes are on the extension of the National Homeownership Campaign (HOC) until 2022.

The campaign, which ends on December 31, has helped developers mitigate the impact of the pandemic.

Kenanga Research, in a recent report, pointed out that property sales by developers have been good.

“Despite the unexpected order of full movement control imposed in June, we note that all developers under our cover are still on line to meet their inside sales target set at the start of the year, with the exception of Malaysian Resources Corp Bhd.

“EcoWorld Development Group Bhd and Sunway Bhd had already exceeded their initial sales forecasts.

Nonetheless, Kenanga Research said the real test will take place when the HOC ends at the end of this year.

“Unless the HOC is extended again, the stamp duties (on the transfer memorandum and loan agreements) which are currently being waived will come into effect,” he said.

The research house added that for properties valued between RM300,000 and RM1 million, the duties would add an additional cost of 2.1% to 2.9% (or RM6,350 to 28,500) in cash. “Based on the trend in auto sales that slowed significantly after the Goods and Services Tax exemption from June 2018 to August 2018, we think most homebuyers would likely seize the opportunity to purchase properties by the end of the year and that property sales would likely come. next year.

The HOC was launched in January 2019 to address the overhang problem in the country.

The campaign, which was to last six months, has been extended for a year.

It proved to be a success, having generated sales totaling RM 23.2 billion in 2019, exceeding the government’s original target of RM 17 billion.

The government reintroduced the HOC in June last year as part of the Penjana initiative to boost the real estate market after it was affected by the Covid-19 pandemic.

The campaign has been extended until the end of this year, with real estate consultants and developers fully supporting the move.

In March of this year, during the Real Estate and Real Estate Developers Association’s 2021 Real Estate Market Briefing, its chairman Datuk Soam Heng Choon revealed that since the reintroduction of the HOC last June, a total of 34,354 residential units valued at RM 25.65 billion had been sold as of February 28, 2021.

Elsewhere, Kenanga Research said real estate development margins since the start of the year have been stable.

“This is due to cost containment and efforts to shift to digital marketing, which drastically reduced sales and marketing costs, while sales remained healthy. “

According to the National Property Information Center (Napic), 92,017 real estate transactions worth RM34.51 billion were recorded in the first half of 2021.

This represents a year-over-year increase of 22.2% in volume and 34.7% in value.

“Performance in all States improved during the reporting period. All states recorded a higher market volume except Putrajaya. The top four states, namely Kuala Lumpur, Selangor, Johor and Penang, accounted for around 50% of the total national residential volume, ”Napic said.

In the primary market, Napic said there had been 16,660 units launched, down 34% from 25,227 units in the first half of 2020.

“Compared to the second half of 2020, new launches were down 24.1%,” Napic said.

He added that the sales performance in the first half of 2021 was 24.7%, surpassing the 12.9% recorded in the previous corresponding period.

“The improvement in sales performance can be attributed to various measures taken by the government such as the HOC incentives and the low interest rate.”

By property type, Napic said townhouses dominated new launches in the first half of this year.

“One-storey (2,624 units) and two- and three-storey (5,455) units together accounted for 48.5% of total units, followed by condominiums / apartments at 41.4% (6,893 units).”

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