By Faiqah Kamaruddin
KUALA LUMPUR: Paramount Corporation Bhd expects subdued property market conditions to persist in the second half of the year, even as Bank Negara Malaysia cut the overnight policy rate to 2.75 per cent in July.
Its group chief executive officer, Jeffrey Chew, said that while the rate cut offers some relief, it is unlikely to significantly boost homebuying sentiment in the short term.
“A 25-basis-point cut helps both in terms of our borrowing cost and consumer affordability but it’s not enough to drive major changes in buying behaviour,” he said at Paramount’s investor and media briefing today.
Chew said a single rate cut is unlikely to have a major impact on the market, but if there are two more reductions or a larger 50-basis-point cut, it could potentially act as a meaningful catalyst for the property sector.
“There are several challenges at play with the fuel subsidy, tariffs, and Sales and Services Tax implementation, which are making buyers more wary.
“While we do not foresee a major downturn, we also do not see strong catalysts emerging in the second half,” he said.
Chew said that for 2025, the developer had expected some growth, but uncertainties, particularly regarding potential actions by the US president, may prompt a revision of its sales targets.
As of July, Paramount had achieved around RM600 million in property sales, slightly more than halfway towards its RM1.5 billion target for the year.
A key contributor to the shortfall is a planned RM170 million disposal of a commercial tower, which Chew said has yet to materialise due to weak investor appetite in the commercial property market.
“We are focusing more on getting tenants in instead of trying to sell,” he added.
Chew said that property will remain the cornerstone of Paramount’s business, just as it has been for the past fifty years.
He added that over the next 10 to 20 years, the company continues to see solid growth prospects in the sector and targets property to account for around 70 per cent of its total business, both in Malaysia and abroad.
As published: New Straits Times