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M’sian property players expect CURBS in Budget 2014 to runaway prices

Thursday, 12 September 2013 17:36

KUALA LUMPUR – Budget 2014 is expected to have stricter policies for the property sector to curb speculations in the industry and help low-and medium-income earners to own affordable houses, says a real estate developer.

Andaman Property Management Sdn Bhd Managing Director Datuk Seri Vincent Tew expects drastic changes in the real property gains tax (RPGT) to be announced in the budget.

“I personally foresee a stern budget. Any policies should be made known clearly and implemented quickly.

“Once the Budget announcements are made, the policies must be made clear and delivered promptly and not wait for six months. A speedier explanation of the new pronouncements will make it easier for property developers to draw up their plans,” he told the PropertyGuru Developers’ Forum on the pre-budget session.

Prime Minister Datuk Seri Najib Tun Razak, who is also the Finance Minister, will table the keenly-awaited budget in Parliament on Oct 25.

The closed door forum saw the participation of Malaysian Property Incorporated, Andaman Properties, Binastra Group and Austin Heights Sdn Bhd.

“From the property developers’ point of view and as an avid investor, obviously I would like the RPGT. Whether the current RPGT schemes are effective or not, I would say the holiday perks should expire this year.

“I would think that basically this year, it has to be tougher, the percentage should be higher. I feel that the market has to correct itself and there must be a balance there,” Tew said.

Meanwhile, Austin Heights Managing Director Datuk Steve Chong said the government planned to increase the RGPT as it wanted to curb speculation to rein in the property bubble.

“The government is concerned about whether the low- and middle-income group have enough houses for them to buy or the speculation has pushed up house prices to become too expensive,” he said.

PropertyGuru Malaysia Country Manager Gerard Kho hoped Budget 2014 would also include specific policies to encourage growth in the key economic centres in the Klang Valley, Johor Baharu, Penang and Sabah and Sarawak.

“Another important area is to have further incentives to assist new purchasers. It could be stamp duty exemptions or “bonus” incentives for first time buyers,” he said.

Kho added another incentive that would be helpful was financial scheme to encourage financial prudence among buyers and tax exemption on rental income for the first three years to promote buyers to keep properties longer.

— BERNAMA

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More analysts warn of property price CURBS in Budget 2014

Friday, 13 September 2013 15:52

KUALA LUMPUR – Analysts expect the possible upward revision of Real Property Gain Tax (RPGT) would impact the property market in the short term but in the long run, it could curb property speculation.

However, some parties see the changes in the RPGT rate would affect the investors’ perception on Malaysia’s property sector policy.

“RPGT is structurally targeting speculators and not investors who buy properties for renting purposes,” said an analyst with MIDF Research who tracks local property counters.

“The increase in RPGT also discourages the property buyers to speculate,” he added.

On August 27, Urban Wellbeing, Housing and Local Government Minister Datuk Abdul Rahman Dahlan had said that the government is considering increasing the RPGT to curb speculation and stabilise houses prices in the country.

Should the tightening measure takes place, analysts expect some insubstantial slowdown in the property market over the short term and it would weigh down sentiments on property counters.

The sentiment-driven equity market pared down gain with the possibility of RPGT hike. Bursa Malaysia Property Index, the benchmark index which gauges 86 property counters, lost about 76 points in just two days.

“We believe there will be a slowdown in property market, more or less. However, we are not sure on the quantum of impact, and we do not make any projection on that,” an analyst said.

Sudden hike will trigger a bombshell

The MIDF research analyst suggests that the RPGT revision is carried out in gradual and moderate phase.

“A sudden hike of 10 per cent will definitely drop a bombshell in market,” he said.

Meanwhile, Interpacific Securities equity research head Pong Teng Siew explains that changes in overnight policy rate (OPR) could have a greater impact on the property market.

“We do not see RPGT causing market demand to slump, plus interest rate is relatively stable now, so market demand should continue to be healthy,” he said.

In Budget 2013, the government revised the RPGT to 15 per cent from 10 per cent for properties sold within two years, and for properties sold between two and five years, the rate was revised to 10 per cent from 5 per cent.

There is also strong probability for the government to revise the property tax rate upwards in the upcoming Budget 2014, which will be tabled at the Parliament on October 25, said Pong.

“The RPGT could serve two purposes. It is also the possible ways for the government to raise revenue and curtail property prices,” he pointed out.

Pong proposes that the government extend the tenure of RPGT tax bracket further, as part of the efforts to chill speculating activities and stabilise property prices.

While home buyers might applaud government’s initiative to further increase RPGT so that house prices will not spiral up further due to speculation, some trade associations are concerned with the possible hike.

The Real Estate and Housing Developers’ Association (REHDA) and the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCIM) are of the opinion that there have been too frequent revisions on RPGT.

“There have been several changes to the RPGT and too frequent changes is sending a “flip-flop” message to the investing public, especially foreign investors,” said ACCIM in a press statement recently.

REHDA,representing property developers in Malaysia, had said that the government needs to study the matter carefully and implement a holistic approach to restrain property speculation.

“There are better mechanisms to curb speculation than just applying RPGT universally, throughout the country,” its president, Datuk Seri KC Yam said.

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Property price rise not due to foreigners, says MPI

By Bernama
Tuesday, 04 September 2012 16:31 Bookmark and Share
KUALA LUMPUR (Sept 4): It is only a perception that foreigners influence the rising property prices in Malaysia, as they are involved in a very small percentage of property transactions, says the Malaysia Property Incorporated (MPI).General manager Veena Loh Geok Mooi said foreigners owned only two% of total properties transacted last year in Malaysia, although in certain states the percentage was higher, at 25% in Johor and 11.5% in Kuala Lumpur.

“In Johor, property prices appreciated 0.6% over the last 10 years while prices in Kuala Lumpur appreciated 5.5% over the same period.

“In almost all states in Malaysia except Sarawak, foreigners can only purchase properties above RM500,000 and in the past eight years, there has been little price appreciation of properties above RM500,000,” she told a media briefing here on Tuesday.

Loh said over a 10-year period, the highest house price appreciation was in states with low population of foreigners — namely, Sabah, Terengganu, Perlis and Pahang.

She said overall for Malaysia, prices started rising after 2009, going up 6.7% and 9.9% in 2010 and 2011 respectively.

“We should not actually label the foreign buyers as foreigners. The main foreign buyers are actually Malaysia My Second Home buyers, expatriates and diasporas.

“The large percentage of foreign owners from Johor are likely to be the Malaysian diaspora residing in Singapore,” she said.

Loh said higher property prices have very little to do with foreigners but instead are due to such factors as supply, shortage of prime land, rising building material costs, all-time low lending rate since 2006 as well as speculative activities in the local property industry. — Bernama

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Posted by on September 6, 2012 in Property News

 

Rehda’s wishlist for upcoming Budget

By Nadia S Hassan of theedgeproperty.com

Tuesday, 04 September 2012 16:49

PETALING JAYA (Sept 4):  The Real Estate & Housing Developers’ Association Malaysia’s (Rehda) wish list for the upcoming budget include a firmer stand on policy and incentives for foreign and first time buyers, according to president Datuk Seri Michael KC Yam.

“Among the things we are hoping for in the budget include leaving the real gains property tax (RGPT) rate as is.   And following on from the report that foreign buyers do not increase property prices, we are hoping for a reduction in stamp duty for foreign purchasers and first time home owners,” said Yam.

He was speaking to reporters at the Rehda media briefing for the property industry survey for the first half of 2012.

Yam also remarked on the government’s plan to make all the properties from 2015 onwards to be purchased on the “build-then-sell” model, stating that it would cut the supply of properties by about 50%.

“We are suggesting that it not be the only method that properties are sold by, and [we should] simply let the buyer decide how they would choose to buy. In the end, it would have an impact on 140 industries,” said Yam.

Yam also commented on the perception that foreign buyers would drive up housing on prices, stating that only around 2% of homeowners nationwide are foreigners. “In addition, foreigners are only interested in high-end properties, which would not be as much of interest to the man on the street,” said Yam.

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Posted by on September 6, 2012 in Property News

 

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