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

ExaStrata Solutions Sdn Bhd chief real estate consultant and chief executive officer (CEO) 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 depends on how the banks' own restrictions are 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, the 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”, is 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.

“Owners 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 [we] 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 are also welcome.

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