The end of the moratorium will be “painful for property owners” as the increase in unemployment would result in foreclosures, says an expert.
“While people will have some cash in their pockets, they are not saving enough to repay their housing loans,” says Dr Daniele Gambero, strategic marketing consultant for property developers with REI Group of Companies and President of Malaysian Proptech Association.
“The lack of confidence is not likely to bolster demand from property buyers and I understand that banks are very much concerned.”
“The problem with the moratorium is that people are spending their savings on their monthly expenditure instead of accumulating for the future.
“While the spending pattern has boosted e-commerce transactions, we should expect a rise in foreclosures as soon as the moratorium ends.
“Banks are very cautious and conservative in approving loans because they see how unstable the markets are at the moment,” says Gambero.
He said that the moratorium also means there is more money in the pockets of the consumers but unfortunately nothing is set aside for property when the moratorium ends.
“I am foreseeing for the next 6 to 12 months quite a sharp rise in foreclosures and auctions of properties. Home owners will be defaulting and bringing banks to foreclose their properties and bring these properties on sale for auctions.
“Even though people are bound to take advantage of the current market situation, as a property investor I would prefer to wait for a good auction where I can buy at a lower price instead of buying the property at the normal price,” he says.