By Beh Chun Chong
WE foresee demand for residential properties to stay resilient in 2021 although the property market as a whole would still be weighed down by the disruptions caused by COVID-19 and some uncertainties going forward.
PropertyGuru Malaysia did a Consumer Sentiment Survey in November which showed that 81% of Malaysians still want to own a home by the end of 2021. Demand for residential properties is still strong, while that for commercial properties, will return in due course once the economy picks up.
To illustrate this, the latest numbers by National Property Information Centre showed that the volume of property transactions in Q3 2020 had actually increased by 7.4% year-on-year (yoy) although the value had dropped slightly by 2.4%.
We believe the strong demand has to do with the low interest environment, and stimulus measures initiated by the government.
My optimism for 2020 is based on facts. Paramount’s own sales was good in Q3 2020. Our sales value during this quarter was 82% higher than the same period last year, thanks to new launches which were very well received at Utropolis Batu Kawan in Penang, Greenwoods Salak Perdana in Sepang and Sejati Lakeside at Cyberjaya.
Despite the disruptions in Q22020 due to the Movement Control Order (MCO), our 9M2020 sales had also increased by 5% to RM503 mil (9M2019: RM481 mil), thanks to strong third quarter sales. To top it off, our unbilled sales of RM1 bil as at September 30, 2020 was also a milestone achieved.
Moving forward, we continue to remain optimistic. Bank Negara Malaysia (BNM) predicts a turnaround in 2021. The gross domestic product (GDP) is expected to be in the range of -3.5% to -5.5% growth for 2020 with a return to pre-COVID levels in 2021. All parties must now ensure that the momentum we have achieved continues.
The low interest environment is expected to continue, and the Government should continue to facilitate demand while making it easier to own a home, especially for first time buyers.
REHDA has been pushing the Government to review compliance cost. A reduction in costs will enable developers to pass on savings to homebuyers and result in more sustainably priced housing.
Our other concern is that banks seem to be cautious about approving new loans. We hope this will be resolved soon as the chain effect could affect economic recovery.
Everyone is now waiting with bated breath on how the different vaccines will work out with thousands of people already inoculated in UK, and approvals granted in different countries, including the US and Singapore. The situation may turn around much faster than we expect. The good news for Malaysians is that the vaccine will be free.
Ultimately, we believe the right products at the right prices will always sell. Location and strong existing infrastructure are still important factors for buyers.
Taking on board these factors, Paramount will be launching a freehold residential project near the Kuala Lumpur City Centre in 2021 and expects good response especially from the working executives around the area.
We will also be launching a freehold, low density condominiums at Arinna Kemuning Utama, in Shah Alam, which come with smart living features.
In addition, we expect the take-up rates our development at Berkeley Uptown in Klang will continue to improve with the newly opened Sri KDU International School campus there.
We will also continue to launch new phases of our award-winning Bukit Banyan development in Kedah, Utropolis Batu Kawan in Penang, Greenwoods at Salak Perdana and Sejati Lakeside in Cyberjaya. All these lead us to set an ambitious sales target of RM1.5 bil for FY2021. – Dec 23, 2020
Beh Chun Chong is the CEO of Paramount Property Development Sdn Bhd.
The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.