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Property buying activities to increase with PENJANA incentives

June 7th, 2020 Leave a comment

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The National Economic Recovery Plan (PENJANA) incentives announced on Friday are expected to heighten property buying activities in the next few months.

ExaStrata Solutions Sdn Bhd’s chief real estate consultant and chief executive officer, Sr Adzman Shah Mohd Ariffin, said the stamp duty exemption under the revived Home Ownership Campaign (HOC) would certainly boost the sales of new residential properties priced no more than RM2.5 milion.

“On top of that, developers are required to give a 10% discount on the prices (to qualify for the exemption). This incentive is further enhanced by the lifting of the 70% margin of financing limit for the third housing loan onwards (for properties valued at RM600,000 and above).

“The current low bank lending rate will also help to encourage more buyers to start buying properties provided that that they can qualify for a loan,” he told Bernama.

He added that this really depended on how the banks’ own restrictions were going to be loosened up for the would-be purchasers to qualify.

On the real property gains tax (RPGT) exemption, Adzman said this would encourage owners to dispose of residential homes during the period of June 1, 2020, to Dec 31, 2021.

“However, this may result in the sub-sale market competing with the sale of developers’ unsold housing stock.

“Nevertheless, this will help the owners who need to liquidate due to financial woes to gain more since the RPGT will be exempted,” he said.

Meanwhile, Elvin Fernandez, managing director of valuer and property consultancy Khong & Jaafar Sdn Bhd, said the big issue in the Malaysian property market — “the elephant in the room” — was the substantial oversupply of properties, be it residential or commercial.

“In the residential sector, the underlying fundamentals are stronger mainly because the vast majority of owners are owner occupiers who would not be easily shaken even with the severe downturn in the economy we are now facing.

“The owner of residential properties who are not desperate will hang on and not sell their houses at distressed prices,” he said.

On the other hand, in the commercial space like office buildings and retail centres, the oversupply had greater consequences, Fernandez said.

“To rebalance the various sectors of the property market will need a deeper and more holistic study and appropriate measures taken to make the property market more efficient and supportive of the economy in general,” he highlighted.

As for the incentives announced, he viewed the HOC as good in the sense that it might help to clear some of the oversupply in the residential sub-sector while the stamp duty exemptions were also welcome.

“The RPGT relief is good but it is only for residential properties and not as extensive as expected, especially on the RPGT after five years.

“The uplifting of the 70% margin of financing limit is also a very good move, as the banks should be allowed to assess their risks,” he added.

Source: Bernama

 

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  1. jinggo
    June 8th, 2020 at 14:46 | #1

    bullshit, the economy has collapsed.
    no one is dumb enough to buy property this year.

  2. teoh
    June 8th, 2020 at 17:23 | #2

    @jinggo

    Hahaha…..Just because your finance has collapsed doesn’t mean everyone else’s has collapsed. In fact, I just got a promotion and a pay rise last week, and with the money I made in the last few weeks in stock market, I am actually looking for a bigger house for myself. And I feel the time is right for me to start shopping for a new house now, as our interest rates would be going down further in the very near future. My condolences to you for your collapse, good luck to you jinggo boy!

  3. KC
    June 8th, 2020 at 23:11 | #3

    On the contrary, selling activities will increase to take advantage of the zero RPGT. Supplies will overwhelm demands.

  4. KC
    June 8th, 2020 at 23:51 | #4

    Activities will definitely jump up but prices will erode further.

  5. ahbeng
    June 9th, 2020 at 14:10 | #5

    Penang has no law only Rasua – Caveat Emptor.

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