It is still too early to measure the full impact on the country’s property sales, says property consultant
by FARA AISYAH / pic by MUHD AMIN NAHARUL
FOREIGN buyers’ interest in the country’s property market, particularly purchases from China and Hong Kong, has almost come to a grinding halt as both regions continue to be rattled by the coronavirus outbreak.
The Chinese were one of the key markets targeted by local developers in the past, while the political unrest in Hong Kong saw its residents scurrying to countries like Singapore and Malaysia to purchase a home.
Death toll over the flu, which was officially named Covid-19, has caused more than 1,700 deaths, while those infected are inching towards the 90,000 mark.
Local property developers were banking on Hong Kongers to snap the unsold properties after the anti-government rally, which has lasted for more than seven months. But the Covid-19 outbreak has weighed on China’s autonomous territory’s economy.
“For the time being, foreign demand for Malaysian properties, particularly from China and Hong Kong, are slowing down or almost stopped as they (tourists) have stopped coming (to Malaysia) due to the coronavirus outbreak,” VPC Realtors (JB) Sdn Bhd Asia-Pacific property consultant Bruce Lee told The Malaysian Reserve.
But he said it is still too early to measure the full impact on the country’s property sales. Lee said the slowdown would be temporary.
“When the coronavirus issue is over, perhaps in six months’ time, I anticipate demand from Chinese and Hong Kong buyers to improve tremendously due to bad experience for those who didn’t buy or own property overseas,” Lee said.
He said the lowering of the threshold to RM600,000 for foreigners to buy unsold properties in the country would boost sales. Buyers from China have been snapping up properties in the country due to their lower prices compared to Singapore.
Recent reports from Chinese international property portal Juwai.com and Malaysian real estate agency network IQI Global showed mainland Chinese buyers bought RM8.4 billion (US$2 billion) worth of properties or 12.1% of the overall transaction value in 2018. But the amount sold only accounted for 0.4% from the total property transactions.
Juwai-IQI said about RM4.3 billion worth of new residential construction in Malaysia is already intended for foreigners, including Chinese and Hong Kong investors.
The report said Chinese buyers offer a significant multiplier effect as the impact of their investment spreads to other sectors, such as retail, hospitality, manufacturing, banking, insurance and transportation.
The property sector did amicably well last year, boosted by the Home Ownership Campaign with mortgage applications reaching a new high, while the country’s banking sector’s total outstanding housing loans reached an all-time high of RM572 billion as of December 2019.