The Covid-19 pandemic has disrupted the real estate market in more ways than one. The subsequent movement control order (MCO) and conditional and recovery periods have added to the challenges faced by property industry alongside the economic downturn.
Despite all these setbacks, the question on many potential buyers' lips is whether to buy or not: Does this scenario makes an opportune time to buy real estate now?
Malaysian Institute of Estate Agents (MIEA) former director and registered estate agent Christopher Chan believes that this is the case.
He pointed out that several factors supported this time period. Among them was the favourable interest rate, which is at an all-time low.
In addition, Bank Negara has cut the Overnight Policy Rate (OPR) by 25 basis points to 1.75% to spur the economy. The Real Property Gain Tax (RPGT) exemption from June 1 2020 to December 31, 2021 provides a great comfort to property sellers who are interested in disposing of their property.
This, however, has yet to be gazetted by the government, Chan said.
"The primary market is also very interesting as, under the Home Ownership Campaign (HOC), buyers are entitled to many goodies such as the stamp duty exemption on the instrument of transfer and loan agreement for residential homes priced between RM300,000 and RM2.5 million. Developers are to give a 10% discount at least.
"The exemption on the instrument of transfer is limited to the first RM1 million of the home price while full stamp duty exemption is given on loan agreement effective for Sale and Purchase Agreements signed between June 1, 2020 and May 31, 2021," he added.
Furthermore, the third housing loan onwards for property valued at RM600,000 and above will be uplifted during the period of the HOC. There are also some goodies in store for 1st time home buyers in the secondary property market whereby they are entitled to stamp duty exemption on the Memorandum of Transfer (MOT) and Loan Agreement for property purchases priced no more than RM 300,000.
As regards foreigner buyers, there is also an excellent opportunity for them now as the State Government of Selangor has reduced the minimum purchase price threshold for strata properties, including strata landed homes.
Chan said the Covid-19 pandemic, MCO, CMCO and RMCO would not stop people purchasing real estate, particularly to those who are ready and able to buy.
However, founder of kopiandproperty.com and Ten Auctioneers Sdn Bhd CEO Charles Tan pointed out that it is not the timing but the person and the person's need that was more important.
A slow property market is an advantage to the buyer, unlike when the market is booming, and power rests with the sellers.
"Some people may be thinking that it is best to wait until the situation is clearer. However, if we look at the transaction numbers, (the buying) continues to happen. The reason is simple. The ones who understand property investments will continue to buy," he said.
"Thus, it's super important to learn about property investment and read more instead of following what the majority says," he advised.
To those who are hoping for a Covid-19 vaccine to materialise first will have a long wait, he said, as the vaccine is unlikely to arrive even in the next 12 months. "How long would we wait? That is a question for everyone to ponder," he added.
Money will always be an issue. For first-time homebuyers who want to buy a dream home, Tan said they should opt for a home to build their dreams in instead.
"Dream homes will continue to change as people's earnings grow. Stay focused on managing the cost of a roof over your head. Buy a smaller place, buy slightly further away or buy a high-rise versus a landed home (first)," he advised.
Even if buyers have financial limitations, they may try getting a PR1MA home, under the flagship of 1Malaysia Housing Programme, added Chan.
"Alternatively, buyers can opt for the rent-to-own approach," he said.
If money is not an issue, it is a deeply personal choice as to whether one would like to live in a high-rise or landed property, Chan said.
"For purchase for investment purposes, one can perhaps begin the journey with a reasonably priced residential property in line with one's budget to get a taste of the experience," he said.
Charles reminded that a property could be a hedge against inflation.
"The value of money will keep going down due to inflation. Thus, prices of all goods and services, including property will go up," he said.
"For working professionals, a property can ensure that we do not go into poverty because when we retire and our salary stops, the rental income does not stop," he said.