KUCHING: As property and construction sectors are restarting work, however due to the standard operating procedures (SOPs) set for these industries, it will definitely affect the property prices, said Sarawak Housing and Real Estate Developers’ Association (Sheda) Kuching Branch chairman Sim Kiang Chiok.
He said with social distancing that has to be observed in construction sites, foreign workers having to undergo Covid-19 testing and requirements on workers’ quarters will affect time and cost of doing business.
“The social distancing will reduce the number of workers per site and increase the time taken for construction. The Covid-19 tests will take time and the cost to be borne by the employer, plus the recent law on workers’ quarters will cost more to implement.
“All these costs will be reflected in the final price of the products be it a house or a bridge,” said Sim in a statement on Monday (June 15).
He viewed that it was more important to protect life and the increase in compliance costs should be accepted by all.
“We can expect low business volume and higher cost as most potential house purchasers would put off such a major decision till they can feel they can have a more secure future be it in their jobs or businesses.
“As such, there will be a need for the government to take the lead to pump prime the economy and bring back the confidence and optimism,” he stressed.
He said the movement control order (MCO) and conditional movement control order (CMCO), have stopped and slowed down many construction activities in the country.
And most construction contracts provide for extension of time and there will be much contractual claims in the coming months unless the government will intervene with ‘Covid-19 Law’ to provide universal solution for all contracts delayed due to the pandemic.
“The government has announced that it will be tabling several Bills related to Covid-19 to assist the sectors which are affected by the pandemic. Hopefully it would assist in saving time and litigation cost for all contracts affected by the pandemic,” he said.
In the development sector, he said the government has announced the continuation of the Housing Ownership Campaign (HOC) in the short-term economic recovery plan on June 5 to help create interest in the residential property market to help reduce the overhang properties and to regenerate the property sector.
Apart from that, he said incentives such as stamp duties waiver for residential houses price from RM300,000 until RM2.5 million and 10 percent discount in property price are a good restart for the property market.
“Moreover, the Real Property Gains Tax (RPGT) is waived for up to three residential properties from June 1 till Dec 31, 2021 and for the third housing loan is also allowed at higher margin than 70 percent but subject to the lending bank risk assessment during the HOC period,” he said.
Sim said that he hoped the government will extend this benefit to all property sectors be it commercial, industrial or agricultural.
On another note, he said most developers and contractors in Sarawak know the importance in keeping to the SOPs to prevent the spread of the deadly virus.
“We are glad that all foreign workers have to be tested for Covid-19 before they can start work.
“Our request is also that there could be more approved labs and clinics apart from the few private hospitals that could do the test for these foreign workers,” he said.
He said the recent case in here is an eye opener for the industry and that the medical teams are very efficient to trace all the close contacts and instruct temporary closure of the construction site.
“The second wave of Covid-19 would be upon us if we all don’t adhere to the social distancing, health and hygiene guidelines.
“And for our construction site, we can’t afford to be closed due to the infection among the workers, and upmost care will be taken to ensure that the SOPs are adhered to,” said Sim.