M’sian property companies report rising home sales
Govt measures such as scrapping property gains tax paying off: survey
RECENT measures by the Malaysian government to liberalise the property market appear to be paying off with real estate developers reporting higher sales in the intervening period, according to preliminary findings by the Real Estate & Housing Developers’ Association (Rehda).
The blanket exemption on real property gains tax (RPGT), which took effect on April 1, had the biggest impact, the survey found.
The survey, from April 21 to May 8, covered 153 property companies or slightly over 10 per cent of Rehda’s 1,000 members.
Slightly over a fifth reported receiving more enquiries from foreigners and locals. In terms of sales, 18 per cent said sales to foreigners jumped 8 per cent and to locals by 32 per cent.
Sunway City enjoyed brisk sales in the past two months, 80 per cent higher and mainly from foreigners, its managing director Wong Choon Kee observed.
The removal of Foreign Investment Committee (FIC) approvals for foreign ownership of houses costing RM250,000 (S$111,545) and above and unlimited loans for non-residents were ranked second and third, respectively, in terms of impact on sales.
An uptick in property sales aside, those interviewed saw certain issues as possibly diluting the measures. Topping the list was the fear by potential buyers of a flip-flop in the new regulations and policies - for example, how long RPGT would be held in abeyance. Such concerns were holding them back from signing on the dotted line, the survey found.
Indeed, the government has merely exempted RPGT, not abolished it, pointed out Rehda deputy president Michael Yam.
‘It is not a repeal of the Act,’ he said, adding the government could re-impose the tax should there be excessive speculation. ‘But we are almost certain for the next five years, they won’t bring back RPGT.’
Capping stamp duty charges at a maximum of 2 per cent - currently the first RM100,000 is levied one per cent, the following RM100,000 at 2 per cent and above RM500,000 at 3 per cent - would boost the new build market, Mr Yam said, and added that Rehda has asked that its request be considered.
Other challenges to the sector, according to survey respondents, include delay in state government approvals, commercial properties still requiring FIC approvals and yields on Malaysian properties being unattractive.
Respondents also found ‘affordability problems’. They said that the gap between market prices and what buyers could afford was fairly significant.
Rehda representative Jeffrey Ng, who is the association’s immediate past president, stressed prices were set to rise.
‘Costs are moving up whether we like it or not. If you don’t buy now, chances are prices will go up 12 months later.’
Despite the threat of higher prices, Malaysia has an estimated 26,000 unsold residential units worth RM4.2 billion currently, most located in areas not popular with buyers.
The government has been trying to revive the market with incentives mainly aimed at foreigners given the low prices of local properties vis-a-vis the region.
In mid-April, it said that development approvals would be shortened drastically, but developers say it is still early days. ‘It’s a bold move, but the challenge is in the implementation,’ Mr Yam said.
Source : Business Times - 16 May 2007
Loading ...
Post a Comment
Tell me a bit about yourself; who you are, where you're from, what information you would like to see on this site. As I continue to provide you with Singapore property happenings, your feedback will encourage me to post more frequently. Thank you.