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WE foresee demand for residential properties to stay resilient in 2021 although the property market as a whole would still be weighed down by the disruptions caused by COVID-19 and some uncertainties going forward.

PropertyGuru Malaysia did a Consumer Sentiment Survey in November which showed that 81% of Malaysians still want to own a home by the end of 2021.  Demand for residential properties is still strong, while that for commercial properties, will return in due course once the economy picks up. 

To illustrate this, the latest numbers by National Property Information Centre showed that the volume of property transactions in Q3 2020 had actually increased by 7.4% year-on-year (yoy) although the value had dropped slightly by 2.4%.

We believe the strong demand has to do with the low interest environment, and stimulus measures initiated by the government.

My optimism for 2020 is based on facts. Paramount’s own sales was good in Q3 2020. Our sales value during this quarter was 82% higher than the same period last year, thanks to new launches which were very well received at Utropolis Batu Kawan in Penang, Greenwoods Salak Perdana in Sepang and Sejati Lakeside at Cyberjaya.

Despite the disruptions in Q22020 due to the Movement Control Order (MCO), our 9M2020 sales had also increased by 5% to RM503 mil (9M2019: RM481 mil), thanks to strong third quarter sales. To top it off, our unbilled sales of RM1 bil as at September 30, 2020 was also a milestone achieved.

Moving forward, we continue to remain optimistic. Bank Negara Malaysia (BNM) predicts a turnaround in 2021. The gross domestic product (GDP) is expected to be in the range of -3.5% to -5.5% growth for 2020 with a return to pre-COVID levels in 2021. All parties must now ensure that the momentum we have achieved continues.

The low interest environment is expected to continue, and the Government should continue to facilitate demand while making it easier to own a home, especially for first time buyers.

REHDA has been pushing the Government to review compliance cost. A reduction in costs will enable developers to pass on savings to homebuyers and result in more sustainably priced housing.

Our other concern is that banks seem to be cautious about approving new loans. We hope this will be resolved soon as the chain effect could affect economic recovery.

Everyone is now waiting with bated breath on how the different vaccines will work out with thousands of people already inoculated in UK, and approvals granted in different countries, including the US and Singapore. The situation may turn around much faster than we expect. The good news for Malaysians is that the vaccine will be free.

Ultimately, we believe the right products at the right prices will always sell. Location and strong existing infrastructure are still important factors for buyers.

Taking on board these factors, Paramount will be launching a freehold residential project near the Kuala Lumpur City Centre in 2021 and expects good response especially from the working executives around the area.

We will also be launching a freehold, low density condominiums at Arinna Kemuning Utama, in Shah Alam, which come with smart living features.

In addition, we expect the take-up rates our development at Berkeley Uptown in Klang will continue to improve with the newly opened Sri KDU International School campus there.

We will also continue to launch new phases of our award-winning Bukit Banyan development in Kedah, Utropolis Batu Kawan in Penang, Greenwoods at Salak Perdana and Sejati Lakeside in Cyberjaya. All these lead us to set an ambitious sales target of RM1.5 bil for FY2021. – Dec 23, 2020

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KUALA LUMPUR (Nov 27): Paramount Corp Bhd returned to the black with a net profit of RM19.82 million in its third quarter ended Sept 30, 2020 (3QFY20), after the the property developer slipped into a net loss of RM3.7 million in the preceding quarter ended June 30.

The improved earnings come as quarterly revenue tripled to RM218.87 million from RM64.20 million in 2QFY20, its bourse filing showed, following the resumption of construction activities for a full quarter, coupled with strong sales from new property launches.

Even on a year-on-year basis, Paramount’s revenue is up 39.3% from 3QFY19’s RM157.12 million, thanks to higher property sales, which lifted the group’s profit before tax from its continuing operations to RM36.6 million, about five times the RM7.4 million it recorded previously.

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Even though property is a favoured asset in Malaysia, it was not spared by the pandemic. The property market declined in the first half of 2020, with the number of transactions falling 28% as value of those transactions fell 32% on-year to RM47 billion.

In line with that, property player Paramount Corp’s saw earnings swing to a loss as revenue fell 70% on-year in the second quarter.

Is the worst over for Paramount?

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KUALA LUMPUR (Sep 2): Paramount Corp Bhd remains bullish on the prospects of the property market as interest rates remain low, saying it will help regain demand that was affected during the Movement Control Order period.

As a result of the restricted movement policy, Paramount’s property sales for the cumulative six months ended June 30, 2020 (1HFY20) came in at RM193 million, compared with RM310 million for the corresponding period last year.

This affected the group’s second quarter ended June 30, 2020, which ended in the red with the group posting a net loss of RM3.7 million compared with a net profit of RM28.47 million a year ago.

For 1HFY20, however, the group’s net profit surged 13 times to RM463.25 million from RM34.63 million a year ago, contributed by the gain recognised on the disposal of its pre-tertiary education business of RM460.6 million.

Paramount group chief executive officer Jeffrey Chew said the group’s prospects for 2HFY20 will be boosted by higher property launches.

Paramount has an estimated RM640 million worth of launches in the pipeline — all residential — which is 121% more than what the group launched in 1HFY20, said Chew.

It also had unbilled sales of RM873 million as at June 30, 2020, which will continue to provide some visibility on its cash flow in the near term, Chew said. The pace of conversion into billings, however, will largely depend on construction progress.

“Demand has picked up a lot. Why? Government initiatives have helped, but one other important factor is low interest rates.

“And this low interest rate environment is very favourable to property developers. Hence, I am very bullish on Paramount and all developers,” he told a media and analyst briefing on the group’s 1HFY20 financial performance today.

Meanwhile, the group is sitting on a cash pile of RM324.4 million, which will enable it to do more land acquisitions in the near future, he said. As at June 30, 2020, Paramount had 505.1 acres of undeveloped land in the Klang Valley, Kedah and Penang.

On the government’s proposed vacancy tax on property developers, Chew said Paramount would not be taxed as much if it materialises, as the company does not have many vacant units. However, he acknowledged that other property players could be adversely affected.

Last month, the Housing and Local Government Ministry announced that it was formulating a tax that could be imposed on developers who fail to sell their properties as early as 2021, in an effort to reduce overhang of residential units in the country.

“If they do this, the supply will become very specific because property developers do not want to be taxed. Developers will be even more worried to do new launches. It will curtail supply, and will therefore drive prices up.

“So I believe it’s not a good move and there are other ways to go about this. With the Covid-19 pandemic still ongoing, many people need a place to stay so we need house prices to be cheap,” Chew added.

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