Besides prices, poor locations and lack of infrastructure have turned away many prospective buyers

by ALIFAH ZAINUDDIN / pic by HUSSEIN SHAHARUDDIN

THE Home Ownership Campaign (HOC) recorded sales of 1,144 property units valued at RM650.87 million as at June 7 this year, much lower than the figures targeted by the industry.

Housing and Local Development Minister Zuraida Kamaruddin, however, did not provide a breakdown on the units sold in her recent parliamentary written reply to a question from Cha Kee Chin (Pakatan Harapan-Rasah).

Cha had queried on the impact of the HOC on the housing sector following its launch on Jan 1 this year. The campaign was meant to encourage home ownership and mop the excess properties flooding the market.

The six-month sales figure accounts only a fifth of the RM3 billion sales target set by the Real Estate and Housing Developers’ Association Malaysia (Rehda) for the initial January-June campaign period.

But it is hard to judge the success without the exact breakdown of the units sold. The sector faces a severe glut due to overbuilding in the last few years and prices are beyond the purchasing power of the majority of the population. Many of the unsold properties are high-end largely condominiums and priced over RM500,000.

While the government wants to encourage house purchases, many borrowers also do not meet the grade based on their current debt servicing ratio. The central bank has been trying to manage to drive down household debts, fearing a financial crisis will repeat the debt fiasco during the East Asian financial crisis of 1997/98.

Besides prices, poor locations and lack of infrastructure have turned away many prospective buyers. Visitors to the HOC also complained that the discounts offered by property developers are very small.

It is believed that developers can afford to hold on to the properties without resorting to a fire sale as they have the cash pile to survive the current downturn period.

However, an industry source described the performance as “very bad” as the underlying purpose of the government-backed campaign was to clear at least half of the unsold residential properties in Malaysia, which stood at 32,313 units valued at RM19.86 billion as at the fourth quarter of 2018.

“It is not as what the government or even the industry expected. In other words, the campaign failed to meet its target,” the source told The Malaysian Reserve (TMR).

It is also believed that a size-able portion of the sold units comprises low-cost homes developed by Perbadanan PR1MA Malaysia.

Earlier in March, it was reported that a total of 4,795 units of PR1MA homes with a sales value of RM1.24 billion were booked between March 1 and March 21.

Prior to that, TMR had also quoted a source who revealed that over 250 units of PR1MA homes worth RM70 million had been sold during the three-day Malaysia Property Expo in Kuala Lumpur (KL). The figure also represented PR1MA units sold in Sabah and Sarawak.

Most of the units sold were located in KL — in particular, Brickfields with 94 units, followed by Jalan Jubilee (41) and Alam Damai (26).

More than 50%, or about 183 residential units, were locked in at the expo in KL with about RM57.6 million worth of cumulative gross development value.

During the six-month campaign period, PR1MA offered discounts and rebates of up to 30%.

Zuraida announced last week that the HOC would be extended for another six months until Dec 31 this year, following requests by both buyers and developers.

She said the campaign has been well-received since its launch in January, and that an extension will hopefully “allow a lot more people in the country to own a home and help put the housing industry on the right track”.