Budget 2022 falls short for property, construction sector expectations

by S BIRRUNTHA / pic by TMR FILE

PROPERTY and construction players have noted that Budget 2022 does not offer much for the industry as a whole, adding that it has fallen short of their expectations.

CCO & Associates (KL) Sdn Bhd ED Chan Wai Seen said the budget, will at most, help sustain the prevailing market sentiment as the focus remains on affordable housing and encouraging home ownership among the prospective first-time house buyers.

“The measures are not enough to improve the demand for high-end properties or to sustain or to improve prices of certain properties or projects that have gone through a correction even before the Covid-19 outbreak,” he told The Malaysian Reserve (TMR) yesterday.

Assuming there is no issue on funding the measures in Budget 2022, Chan opined there should be some bold measures to address the household debts among the public.

He added that the high household debts will continue to affect the country’s economic growth and the Malaysian property market.

With high household debt, the country’s economic fundamentals will always be subject to uncertainties and keep financial institutions cautious on approving loans. In turn, the purchase of properties will continue to be dominated by the high-income group, he said.

VPC Alliance (KL) Sdn Bhd MD James Wong said the Budget 2022 allocation for the property sector was disappointing.

Wong, who was the former president of the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia (PEPS), said most of the measures outlined did not cover the association’s wishlist.

PEPS had called for the government to revive the industry and resolve loose ends regarding overhang properties and issues surrounding affordable housing, as well as property taxes in the budget.

The Real Estate and Housing Developers’ Association (Rehda) president Datuk Soam Heng Choon said the association is hopeful the various measures announced to revive the economy in the budget would help towards a recovery in the property market.

PropertyGuru Malaysia country manager Sheldon Fernandez said more could have been done to revitalise the property sector under the Budget 2022.

He hopes the government would extend the Home Ownership Campaign (HOC) to 2022 and the incentives under the campaign be extended to the secondary residential market to help spur the economy and encourage first-time home buyers to consider buying subsale properties.

MIDF Amanah Investment Bank Bhd noted that while the development expenditure (DE) of RM75.6 billion in Budget 2022 is higher than last year, there were no new megaprojects announced.

It added that despite the record high DE and the 12th Malaysia Plan targets, the visibility and status of some highly anticipated projects are in limbo.

“We observed the budget’s impact might be muted on some companies under our construction coverage as continuation and re-introduction of the mega public transport infra projects, such as the shovel ready Mass Rapid Transit Line 3, are not included,” the investment bank noted in its Budget 2022 reaction report.

MIDF expects the construction sector to be the most obvious beneficiary of Budget 2022 as the DE came in higher.

“It must also be highlighted that in the run-up to Budget 2022, the construction sector was the fourth best performer behind property, plantation and energy,” it noted.

Master Builders Association Malaysia (MBAM) expressed disappointment over the lack of new mega infrastructure projects to pump-prime the construction industry in the Budget 2022.

Its secretary general Datuk Seri Eric Kuan said the association is expecting a more uplifting Budget 2022 announcement for the construction industry.

“MBAM is expecting a more uplifting 2022 budget announcement for the construction industry. Disappointingly, there were no announcements of new mega infrastructure projects,” he said in an immediate statement after the tabling of Budget 2022 last Friday.

MBAM had appealed to Putrajaya to provide more assistance for the construction industry to revive and sustain the construction sector.

He added that the industry remains over-dependent on unskilled foreign labour and the industry is in need of new foreign workers now to help with the recovery and hopes the process of bringing labour from abroad will be much faster.