By FARA AISYAH / Pic By TMR
LANDLORDS worldwide are reported to be giving their tenants rental discounts or rental holidays for months to provide them with more spending power.
Everyone must do their part in dealing with the pandemic, an expert in the property market said.
“For landlords, it is time to show compassion to their tenants by reducing rental.
However, in helping their tenants to mitigate the impacts of the Covid-19 outbreak, landlords are also in need of support.
“For authorities, help landlords by giving discounts on quit rent, assessment rate and similar cut on utilities bills,” the expert, who requested anonymity, told The Malaysian Reserve recently.
Earlier this month, Bank Negara Malaysia slashed its policy rates for the second time in three months to the lowest level in 10 years, as Malaysia joins global economies in battling the fallout from Covid-19.
The Overnight Policy Rate (OPR) was slashed by 25 basis points (bps) to 2.5%, a level last seen in May 2010.
The central bank said the reduction in the OPR is intended to provide a more accommodative monetary environment to support the projected improvement in economic growth amid price stability.
Malayan Banking Bhd, Public Bank Bhd and CIMB Bank Bhd had also lowered their base rates and base lending rates by 25bps.
As such, the interest rate for mortgages has also been lowered which provides landlords more savings.
Another expert in the sector said she has not heard of any rental discounts in the residential property market, but has heard of rent adjustment talks for retail units.
“Landlords may only sustain rent adjustments for a limited time as there are loan repayments to be paid on the properties too.
“The impact of this goes beyond tenants. How long can a business sustain is the key question, and how long will this situation prolong,” she said.
The government announced a RM20 billion economic stimulus package early March, aimed to soften the impact of Covid-19.
The measures include delays of tax payments, discounts on electricity bills, service tax exemptions, financial relieves, and rebates on rentals and landing charges at airports.
The government then announced new allocations under the economic stimulus package, including financial aids for employees who are forced to take unpaid leave.
There is also a 2% discount on electricity bills for commercial, industrial and agricultural industries, as well as for domestic users, from April 1 to Sept 30.
The financial aid includes a RM120 million allocation to benefit 33,000 workers, while the electricity bills discount involves a RM500 million allocation, estimated to benefit over 10 million households, commercial users, industrial and agricultural sectors.