It Never Rains But It Pours

Sector to be severely buffeted in sea of uncertainty

As government around the world grapple with tracking those infected with the corona virus (Covid-19), it is clear that a global market has meltdown.

For some years now, the Malaysia property market has struggled along. The Real Estate and Housing Developers Association (Rehda) has a membership of about 1,000. For non-Rehda member, this mean Malaysia has more than 1,000 developers, some of whom who have bitten the bullet and launched to showcase their latest offering after years of tepid growth in order to generate revenue.

The property market is divided broadly into residential, industrial and commercial segments, which is further sub-divided into office, mall and hotel and hospitality.

Malaysia Association of Hotels (MAH) CEO Yap Lip Seng says between Jan 22 and March 9 year 2020, a period of less than 50 days, the hotel industry recorded the room cancellations totalling amount of RM67.49mil. Besides that, the Malaysian are also cancelling their holiday plans.

Therefore, property and education fairs that usually held in convention centre, have grounded to a halt. All the fairs and venue has been report up to 30% of postponements.

Says Henry Butcher Retail managing director Tan Hai Hsin: “Retailers who are depending on foreign tourists have been severely affected compare with small town malls and those in residential areas.” Between this periods, given the oversupply of mall space, the drop in economic activities will add further pressure on the sector.

Overall, Rahim & Co International Sdn Bhd real estate agency chief executive officer Siva Shanker calls the current market situation as a “confluence of two black swans” and it is difficult to say how the residential market will pan out.

With some developers indirectly dropping prices up to a third during the 2019 Home Ownership Campaign, an analyst who declined to be named says the longer the Covid-19 situation persists, the worse it will get.

The falling number of visitors at develop rs sales galleries have not been lost on Real Estate and Housing Developers’ Association (Rehda) president Datuk Soam Heng Choon.

Since January, developers’ sales galleries have been very quiet.  



Source: Thestar @ Biz Property