The Homeownership Campaign (HOC) is a Government scheme that financially supports Malaysian homebuyers and boosts sales of unsold properties in the market. It was also made to decrease Malaysia's residential overhang, which stood at 31,661 units.
The first HOC was introduced in January 2019 and extended to run for the whole year. In 2020, COVID-19 and the Movement Control Order (MCO) heavily impacted Malaysia's economy across all sectors. So in June 2020, the HOC was reintroduced (HOC 2.0) as part of the Short-Term Economic Recovery Plan (PENJANA) by the Prime Minister. It was supposed to last until May 31st 2021, but the large COVID-19 cases forced Malaysia under a third MCO. Because of this, the government introduced the RM40 billion Pemerkasa Plus aid package on May 31st and extended the HOC 2.0 campaign to run until 31st December 2021.
The HOC highlights for homebuyers are it’s financial incentives like:
Developers were happy about the HOC's reintroduction and the government for making the move to support homebuyers, especially the first timers.
The HOC 2.0 helped the industry run smoother to minimise any negative effects on other parts of Malaysia’s economy. Currently, the number of sales are gradually increasing at a slow pace because of MCO restrictions and some are held back due to delays in securing financing for the property. But the increase in innovation and digital solutions targeting the tech-savvy market has boosted the HOC’s effectiveness. Many developers have cited the HOC 2.0 as a reason for their good performance during the pandemic and it is even expected to play a role in the recovery of the housing market in 2022.
The HOC provided attractive discounts and rebates offered by developers, and the low interest rate environment helps with the industry's steady and good performance. To encourage buyers to sign the SPA and secure opportunities, developers have even rolled out their own additional offers and campaigns alongside the HOC offers. In turn, this helped companies sell their homes and clear unsold stock. An example is Paramount Property’s property sales of RM304 million in 1H of 2021, which was 62% higher than their RM191 million sales in the same period in 2020.
The HOC 2.0 is seen as a lifeline during the pandemic and weak market. It’s financial support is a huge help to those whose personal incomes have been affected. Many buyers aren’t even aware of and haven’t budgeted for MOT or stamp fees, so this is a relief for many.
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While the HOC campaigns definitely have their upsides, it is limited to only the primary residential market and does not benefit the whole residential property market. Because of the ongoing pandemic and it’s prolonged impact on the property industry, the government could improve and extend the HOC measures and introduce new ones for the long road to recovery.
In the future, the Malaysian Institute of Real Estate Agents (MIEA) hopes to see the secondary market included in new HOC campaigns. This is because one of the keys to driving the primary market is a strong secondary one. When buyers see properties increasing in price and high returns by rentals, the interest to buy in the primary market becomes stronger.
Along with this, as the HOC benefits will end this year, new mechanisms should be put in place to keep movement and activity in the market. Holistic, people-first, and sustainable schemes by the government and policymakers are what's needed for the industry’s stable recovery.
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