Glomac: Bring back Home Ownership Campaign
KUALA LUMPUR: Glomac Bhd has urged the government to revive the Home Ownership Campaign (HOC) to help tackle the overhang situation in property, which worsened in the first half of 2018.
Group managing director and CEO Datuk Seri Fateh Iskandar Mohamed Mansor said the package of incentives under the HOC, which was carried out in 1998 and 1999 for a period of three months each, had helped to reduce the overhang units during the Asian financial crisis.
At that time, the government gave incentives for properties priced RM250,000 and below. This time, property developers are asking to revive the HOC for homes priced RM500,000 and below, and for first-time house buyers.
Fateh Iskandar said the Real Estate and Housing Developers’ Association Malaysia has approached the Housing and Local Government Ministry, who has agreed in principle to revive the HOC.
“We have also presented it to the Finance Ministry and they’ve also supported us. So the next step is to bring this to the Economic Council,” he added.
On whether developers are willing to take a haircut if the HOC is implemented, he said many developers are already giving out discounts and rebates just to sell their properties while property prices of completed units are at “record low”.
“We thank the Finance Ministry for taking out a few essential items in construction contracts and we hope the state government will also follow suit because we need a comprehensive and holistic approach. Not only on sales and services tax but other things as well. Then we can see something substantial. Right now there will be some savings, but it’s not substantial enough,” he said, adding that house prices will be lower for new projects.
Meanwhile, Glomac plans to launch RM780 million worth of properties for the financial year ending April 30, 2019 (FY19) and aims to maintain its sales performance of 75-80% of total launches.
The group’s focus for FY19 will remain in the mid-market and affordable segments, with some 65% of its new launches priced RM500,000 and below. Last year, the group launched only about RM250 million worth of new properties and achieved RM214 million in sales.
Fateh Iskandar said it revised its new launches last year from RM700 million, due to slow response to bigger apartment units. The first phase of Plaza Kelana Jaya, which was launched about two months ago, saw 80% sales after the developer changed the apartment size to 450 sq ft to 750 sq ft, from the original size of 1,500 sq ft to 2,500 sq ft.
On the commercial side, Glomac has signed on a new anchor tenant for Glo Damansara Mall. The furniture and lifestyle retailer from China will take up 40% of the mall’s space, bumping up the mall’s occupancy rate to 75%.
“The mall was completed a bit more than two years ago, it’s been in operations for more than two years. So far it’s been very challenging, occupancy rate was below 50% before we signed this new tenant,” said Fateh Iskandar.
He said the retailer already has a presence in the US, Australia and the Middle East. Its presence in Glo Damansara Mall will be its first in Southeast Asia and it expects to start operations in January 2019.
Source: TheSunDaily