KUALA LUMPUR, April 23 — Property developers are well-prepared to cope with the economic impact of Covid-19 compared with the 2008 financial crisis.
Hartamas Real Estate Group founder and group managing director Eric Lim said many development projects done had been financed through equity financing rather than bank borrowings and while some developers formed joint-ventures with land owners to undertake projects.
“So, on that basis, exposure to gearing is much more manageable. I would think this time around, we will be better prepared,” he said on the possibility that the pandemic could trigger a corporate debt crisis amid the prolonged period of falling property prices.
Lim said he expected the property sector to recover in the fourth quarter of this year and normalise by early next year.
“Some even expect the property sector to surge by 2021, a jump from where they are now. So, the banks’ six-month moratorium is a relief both to the individuals and corporations.
“This will cushion the (Covid-19) impact at least for the next six to nine months and probably until the end of the year.
“So, I think the economic stimulus packages would also help especially to the small and medium enterprises (SMEs),” he said during a webinar organised by the Malaysian Institute of Estate Agents (MIEA) on the multi-sector market outlook.
Impetus Alliance chief executive officer and managing director Datuk Seri Michael Yam said Malaysia had faced many crises previously, with the property market having managed to bounce back to a higher level.
Yam said the country has a strong foundation for recovery as the government, private and corporate sectors, as well as the people had built resilience.
Axis REIT Managers Bhd non-executive director Stephan Tew meanwhile said the government is urged to lower the real property gains tax (RPGT) to encourage people to buy or sell properties.
Under Budget 2019, the government announced an RPGT of 5.0 per cent for Malaysians if the property is sold after the fifth year. Up to 30 per cent tax will be charged if the property is sold in three years or less.
Under Budget 2020, the government revised the RPGT imposed on the disposal of properties after five years by setting the market value on Jan 1, 2013, as the property acquisition price for properties acquired before the said date, compared to the current base year of Jan 1, 2000. — Bernama
