Iconic Worldwide Bhd managing director Dato’ Tan Kean Tet said people are now able to consider moving away from cities to suburbs with larger houses, now that Penang’s international travel and vacations have been put on hold.
“Properties launched in Penang are not as many as in Klang Valley, and some developers here had put their launches on hold since January this year or some since last year.
“Lesser launches result in reduced competition – this will somewhat help to cushion the impact for a while.
“Even if prices for properties go soft, especially those on the high-end, there should not be a large decline as seen in previous housing crashes,” he told The New Straits Times.
Touching on overall property sector, Tan said inevitably, the industry has reported a drop in the number of property transactions due to the movement control order (MCO), which has also caused property prices to stagnate.
“We are optimistic about a post-pandemic recovery however, as the property sector has remained active throughout turbulent economic times in the past.
“In addition, Bank Negara Malaysia’s measures to lower the interest rate will also help to reduce the monthly commitment and installment of borrowers, while providing extra cash flow for investment in indexes.
“According to some local industry experts as well as our own deductions, we believe that the property sector in Malaysia will be modest towards the end of 2020 and potentially see a gradual recovery by 2021,” he said.
Property developers need to be creative in their offerings such as bundling their property with different packages or offer value for money products, Tan said, when asked on how would the property sector rebound post-coronavirus and survive the side effects of this crisis.
“It is hard to reduce prices for the existing property products as it is not fair for the ones that have purchased previously.
“However, for new products, prices need to be more competitive. A lower margin is unavoidable. Additional assistance from the government and Bank Negara will be required, such as special interest rates for housing loans and higher approval loan rate,” he said.
When asked on how much Iconic Worldwide has in its reserve to sustain business operations during this crisis period, Tan said the company’s cash reserve is sufficient to sustain till the end of this year.
“We have also sold off all units in our project, thus we do not have any financial issues that will incur from our property development. This will allow us to explore other potential businesses and development opportunities.
“For Iconic Worldwide, we have sold off all units under our maiden property project, Iconic Point back in September 2019. We are currently not facing any unit overhang issue,” Tan said.
Iconic Point, the company’s flagship project in Penang, is a mixed development project located at Simpang Ampat, Seberang Perai and has a gross development value of approximately RM127.81 million.
The project features 49 units of modern semi-detached and detached shop offices and is expected to be completed and handed over by the end of 2021.
“We have restructured our operation to cease some of our loss-making businesses last yea and focused on other businesses that have higher potential such as property development. It was a blessing that we recently completed our property development operations before the pandemic, thus the impact was minimal to us.
“We are confident that we are on the right path, as we are still recognising revenue from our property development segment.
“We are also exploring the possibility to venture into other business that can help to diversify our income stream. One of the areas that we are looking at will be producing face masks and will launch the product in due time once things materialise,” Tan said.