When I was asked about Home Ownership Campaign (HOC) many months ago, I shared my views that for HOC to really work, there needs to be more education to those who have yet to buy a home. These are the people who are always worried all the time every time they read something negative online about the property market. These are also the same people who intends to wait for the best time but when asked when, they have no answer. Unfortunately for the property market unsold units, these are also the largest group of potential buyers. So, after 6 months as well as an extension of the HOC till 31st December 2019, what has happened thus far? Not a lot, really.
Article in themalaysianreserve.com Institute for Democracy and Economic Affairs senior fellow Dr Carmelito Ferlito said, “HOC failed to reduce the number of unsold units, which means the proposed incentives did not stimulate enough demand. Those incentives targeted all price ranges, including affordable homes. If we take out incentives from the high-end segment, I do not see how the situation will change for affordable homes.”
Though the HOC has not succeeded, he felt that the government should carry out any other measure. The demand and supply should just be allowed to continue without any interference. VPC Alliance (KL) Sdn Bhd MD James Wong said the government should not change the HOC focus to only low-cost houses. He said, “HOC will not help developers clear the oversupply if it is just focused on affordable homes. The first half of HOC was a failure, so there should be more concerted marketing efforts in the second half to sell the remaining units.”
Thus far, only a total of 1,144 property units were sold thus far despite the 10% minimum discounts and stamp duty exemptions offered during HOC. Out of all these units sold, 88% were priced below RM300,000 and most were from PR1MA Malaysia and it was offered at 30 percent discount. Please read the full Article in themalaysianreserve.com
I disagree with the ‘letting the demand supply find its own way’ thinking. In the property market, there’s currently a mismatch in terms of what was built and what is needed or what the people could afford. It is definitely not because all these unsold units were too expensive. It’s definitely not due to the often cited loan rejections because if the banks are rejecting, it meant that the applicant are just over-stretching themselves. (Earlier article here.) Let’s understand that majority of all the owners do not need too many speculative buyers or over-stretched buyers who have very little holding power and could cause a crash if there are suddenly a huge number of them leaving the market when their expectations of a quick profit did not happen. Happy following.
<Featured Image is courtesy of Stock Photos from Eviart>
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