The re-tabling of Budget 2023 was generally neutral for the real estate sector, with an emphasis on economic stability, people's well-being, digital advancement, green measures, and SMEs.
CBRE|WTW managing director Tan Ka Leong noted that various areas for the property sector could have been addressed, such as offering incentives for building supplies and homeownership assistance.
Tan believes that incentives should have also been provided to encourage broader adoption of the Industrialised Building System (IBS) and Building Information Modelling (BIM).
The IBS system is a technical term for building a structure by putting together factory-made prefabricated elements. It is a house that is built in sections that are made to specified specifications and then assembled at the point of construction.
While IBS technology provides numerous benefits in the long run, it also presents some significant investment barriers to start.
For years, the Construction Industry Development Board (CIDB) has advocated for the use of IBS, claiming that it will improve quality, reduce costs, eliminate the need for foreign labour, accelerate construction timelines, simplify on-site management and safety, and reduce the construction industry's environmental impact.
But, industry players contend that the IBS is a volume game and that any type of government assistance would help the sector.
"You can't rely on IBS to build a few houses or anything less than 100 units because there is no economy of scale...you need a large volume of houses to construct using the IBS method, otherwise it won't be cost-effective. Some form of incentives should be handed out to encourage developers to build houses using the IBS method," the chief of a reputable Klang Valley-based property developer told NST Property.
The CIDB intends to stimulate IBS use by exempting properties that use more than 50 per cent of IBS components from levy. Otherwise, the fee is imposed at 0.125 per cent of total building work contracts exceeding RM500,000.
According to an article published last year by PropertyGuru Malaysia, the first such project began in 1964 on Jalan Pekeliling in Kuala Lumpur, with the construction of seven blocks of 17-story flats, four blocks of four-story flats, and a 40-story shopping mall. Before their demolition in 2014, they were commonly known as the Tunku Abdul Rahman public flats.
The second pilot project began in Penang in 1965, with the construction of two more residential flat buildings on the Jalan Rifle Range. This was not just the first prefabricated building in Penang, but also the state's first low-cost high-rise housing project.
IBS was employed by Gamuda Land for their 714-unit Rumah Selangorku Jade Hills complex in Kajang, and its adoption reportedly reduced construction time from three to two years.
The Selangor State Development Corporation's 864-unit affordable housing project in Cyber Valley is another project built employing the IBS approach.
SP Setia Bhd has used IBS in residential and commercial constructions such as Setia City Mall, the ACC and Specialty Centre at Hospital Kuala Lumpur, and AIMST University in Sungai Petani, Kedah.
Mah Sing Group Bhd is another major player in the IBS industry. The IBS was originally implemented at the company's M Aruna development in Rawang to increase output quality, construction efficiency, and delivery time.
This enabled the development to receive numerous green certifications from prominent green building certification agencies, such as Malaysia's Green Building Index (GBI) accreditation and Singapore's Building and Construction Authority's (BCA) Green Mark.
Tan of CBRE WTW told NST Property that the IBS will help not only developers manage and complete their projects on time, but also homeowners who will receive their keys per the sales and purchase agreement.
"Many buyers have other commitments when they acquire real estate. Any delay in a housing project will harm home buyers because they will still have to serve the bank loan while waiting for the project to be completed. Control over construction duration and completion are possible with IBS," he said.
Prioritised investment to boost the property sector, says Tan
The budget prioritised investments in the Tun Razak Exchange (TRX) and Iskandar Malaysia, Johor, by designating them as special economic zones to encourage high-quality investments.
Others include the modernisation of Penang and Subang airports, as well as the construction of new ports on Pulau Carey and Sanglang to encourage tourism and the industrial/logistics sectors.
Tan said that these initiatives, together with the New Industrial MasterPlan 2030, will attract high-impact investments.
"The government in the past had introduced new investments in Klang Valley, Penang, and Johor to attract foreign direct investments (FDIs) and establish additional economic corridors, but there was little focus due to inadequate financial and resource resources.
"The current government is now focusing on developing economic corridors to encourage investments, which will send a clear message that the government is serious, and it will also attract FDIs as well as local and foreign property buyers as they are encouraged by the government's commitment," Tan said.
He also anticipates that the RM250 million allocated to tourism will bring in more tourism events and enhance inbound charter flights.
New roads and improvements to Cameron Highlands, Semabuk Lebuh AMJ Melaka Tengah from Port Dickson, Bukit Pelandok, and Sepang, as well as the Senai Desaru Expressway, are projected to boost activity in these areas, Tan said.