The government can extend the benefits of the Home Ownership Campaign (HOC) to the secondary market, according to the National Property Information Center (Napic).

It can also freeze the development of stratified buildings to solve the overhang in the different segments of the real estate market.

The HOC benefits include substantial savings on stamp duty and tax exemption in home loans.

Deputy Director of Inventory at the National Property Information Center (Napic) Ari Adam said expanding the HOC into the secondary market will create a level playing field in the residential segment.

The HOC benefits are currently limited to developer units, but expanding into the secondary market will allow homeowners to reap the benefits when they sell their homes.

The HOC is expected to end on December 31, 2021.

Ari said a freeze on tiered buildings could solve the overhang in the residential and serviced segment, and purpose-built office space and shopping malls, while expanding the HOC into the secondary market will help boost residential sales.

He spoke at the 14th Malaysian Property Summit 2021 of the Malaysia Private Sector Valuers, Property Managers, Brokers and Real Estate Consultants Association (PEPS).

Ari hinted that the 2022 budget could also reveal some news regarding expansion and the potential freeze of tiered buildings.

He said the government and stakeholders need to think “out of the box” as the government expects an increase in tiered units – mainly serviced apartments – as developers try to maximize profits as the economy takes tentative steps towards reopening.

Ari, who was in Johor before the pandemic to see the situation there, said the overall overhang situation in the country is “pretty alarming and we need to think outside the box” on how to fix it.

The unsold completed units – overhanging, in real estate parlance – in residential, serviced apartments and small home offices (SoHos) totaled 57,154 units, with a ringgit value of RM41.54 bil in the first half of 2021. .

Ari said the problem of overhang has been around since before the Covid-19 pandemic, but the pandemic “only reinforced the scenario”.

“As I usually say, data speaks for itself. The question is: what do we do with overhang? Shall we drop the prices?

“Maybe if we had developers (made mandatory) (to have independent feasibility and market studies), there wouldn’t be an overhang. Maybe if developers think about what people are willing or able to pay,” Ari asked.

As for office and retail space, Ari said Malaysia has never seen such a low occupancy rate for both, around 70% as it is today.

“This is the lowest ever. I don’t know if it gets worse or better. We have to find ways to take up all the space we have. There were ideas to turn it into small office centers, data centers or starter homes,” says Ari.