Budget 2017 that was announced today did not provide measures to shore up the property market or to help the bulk of potential homebuyers to own homes.
Heritage Shield Real Estate Sdn Bhd CEO and immediate past president of the Malaysian Institute of Estate Agents K Soma Sundram said Budget 2017 focused more on helping those who can’t afford to buy a property rather than on assisting those who can, especially the middle-income group.
“I’m not excited with this budget as it does not really help in stabilising the property market or to stimulate market growth,” he said.
“Most of the middle-income earners are facing challenges in securing loans to own a home. However, this group of people, which is also the majority of potential homebuyers, seems to be ignored,” he added.
On the increase in stamp duty for properties above RM1 million from 3% to 4%, effective Jan 1, 2018, Soma said this measure could be a burden to homebuyers especially for those who are looking for an ideal home priced at above RM1 million.
Eric Lim, founder and group managing director of Hartamas Real Estate Sdn Bhd, said the proposed benefits and assistance are mainly limited to the PR1MA schemes. “It is regretted that more was not done to boost the property sector as it is a clear driver of the economy. Repeated calls to provide more assistance to first-time homebuyers, regardless of property price, have gone unheeded,” said Lim, who is also MIEA deputy president.
On the “step-up” end-financing for the Perumahan Rakyat 1Malaysia (PR1MA) programme, Lim felt that it should not be limited to only PR1MA.
“By freeing up the financing limitation, it will certainly increase home ownership. While details have yet to be released, there are many new housing developments priced within the RM400,000 price range in which buyers will benefit as well.
On stamp duty increment for properties priced above RM1 million, Lim said the threshold should perhaps be higher as it is fairly easy to breach the RM1 million price point in the Klang Valley. The move will also discourage foreign investors since RM1 million is the floor price for foreign homebuyers.
Meanhile, Lim Boon Ping, training and development manager at Kim Realty and MIEA’s national vice-president said the stamp duty rise was surprising.
“The announcement of the increase in stamp duty for all properties worth more than RM1 million came in as a total surprise for me,” he said. “I believe this move by the government is to tax the rich to boost up tax collection.”
He expects the performance of this particular type of property will continue to soften and the market is expected to experience some adjustment before the measure is implemented in 2018 similar to the situation before the Goods and Services Tax (GST) was implemented.
“Overall, the budget shows that the Malaysian government continues to address first-time home ownership and what was announced are within expectations,” Lim told TheEdgeProperty.com.
Lim also lauded the government’s effort on the “step-up” end-financing scheme for PR1MA as well as the People’s Housing Programme (PPR).