This article first appeared in The Edge Financial Daily on February 22, 2019

KUALA LUMPUR: The six-month National Home Ownership Campaign 2019, slated to kick-off next month to address the issue of affordable housing supply and the overhang in residential properties, is not inspiring as much optimism as the first time the campaign was held right after the Asian financial crisis in 1998.

Panellists at the 12th Malaysian Property Summit yesterday said results from the campaign may not be as significant as when it was first held 20 years ago, due to current tighter lending policies.

Kenanga Investment Bank Bhd head of equity research Sarah Lim said a property would still hold value within three years of completion, but after five to seven years, the value will begin to decline if nobody buys it. After the tenth year, there will be a whole different valuation for the home, she said.

“To be very frank, given the current lending situation, I don’t expect dramatic results from the campaign,” she added.

The campaign was first held for three months in 1998 and 1999. Revived in Budget 2019 to tackle the high number of unsold homes in the country, the new campaign will be launched in March and will feature some 30,115 completed homes.

Real Estate & Housing Developers’ Association (Rehda) Institute chairman Datuk Jeffrey Ng said the previous campaign in 1998 was a success as banks were willing to lend, coupled with various incentives given by the government to encourage property purchases. The campaign was also open to all, regardless of whether the purchaser is a first-time buyer or an investor, which had boost sales.

“I remember this distinctly because I was working on a project then and remembered telling my general manager that I would be very happy to book RM20 million to RM30 million of sales, considering the tough times. The campaign was only for about a week back then, but we achieved close to RM200 million in sales, about 10 times what I had budgeted,” Ng said.

However, he said the scenario has changed over the past 20 years. While government has offered stamp duty exemption and other incentives for the new six-month campaign, he said certain preconditions, such as limiting incentives to first-time buyers, means that only a certain segment of buyers will benefit.

“In that context, I share the view that the outcome may not be as what we saw 20 years back,” he said.

Response rate aside, he said the campaign will be beneficial to buyers as they would be able to pick and choose properties from different developers at one go, rather than visiting 50 different developers.

This creates a win-win situation for the stakeholders involved, he said, as buyers are able to conveniently look through and pick different properties, while developers get to reduce their unsold units.

He also said the economy stands to benefit from the campaign’s positive spillover effects. “One very important point that has not been talked about much is the spillover effects of the campaign. There will be a regeneration or recapitalisation of the balance sheet of developers, meaning if the unsold units come down, the new cash generated can then be put into new developments.

“Property is a key economic contributor to the economy. Every time a house is built, there are roughly 144 sub-sectors of the economy that can also indirectly gain in terms of business,” said Ng.