KUCHING: Property development is going to face difficulties as the economy will not be the same again due to the movement control order (MCO).
Sarawak Housing and Real Estate Developers Association (Sheda) Kuching chairman Sim Kiang Chiok said for the manufacturing sector, the United States, Europe and India were all enforcing lockdowns; thus, he foresaw demand for goods would be low.
“One
good thing is that China has virus under control and they would be able to
produce again but there would be low demand for their goods except for medical
supplies.
“In construction, I hope that government projects will still continue to
push up economic activities — all major projects like Pan Borneo, Coastal Roads
and Bridges, Water Supply Grids, IT connections etc. to help provide jobs and
income,” he said in a press statement yesterday.
Sim also added that in the development sector, there was still demand for housing but would be lower due to possible loss of jobs and lower income caused by the pandemic.
“In housing development, the MCO has delayed the completion of projects and the delays are allowed in most Sales and Purchase agreements, due to Acts of God or Force Majeure; and developers will be able to have their completion period extended accordingly.
“On cost, there will be additional holding cost, overheads, idling time etc. This additional cost cannot be passed on to the purchasers as the price is lock in by the agreement, and purchasers will also be able to enjoy six months automatic moratorium of not having to pay the housing loan according to the stimulus package announced by Prime Minister Tan Sri Muhyiddin Yassin,” he added.
Sim also highlighted that the forecast for house demand for the next 12 months would be poor — unless the stimulus packages helped to kick-start the economy and unemployment was kept under control.
He praised the stimulus packages announced by the federal and state government, however, as an employer himself, Sim said it was not at all helpful nor realistic in providing proof of his company loss of business of 50 per cent since January this year, for the assistance of RM600 for three months for employees.
“We can see that in the next six months, demand by the world market is down as they are all also suffering from the pandemic. The government would be of great help if our employee salaries can be assisted just like in the United Kingdom, where 80 per cent of the salary will be paid by their government.
“We can obviously see that under the tourism industry, there will be much lay-off and without salary assistance by the government, unemployment will rise. Thus, with unemployment, our demand of houses will drop and non-performance loan will rise after the six-month moratorium by banks,” he stated.
“Unprecedented
times call for unprecedented solutions. So, bold moves must be made as soon as
the MCO is over,” he added.
