Malaysia Budget 2017 has successfully been tabled by the Prime Minister Datuk Seri Najib Razak.
Maybe the answer to the question “Will property prices come down?” will reveal itself after having the knowledge of whether the budget benefit the non-GLC property developers. It is possible to bring the price down but developers would not be able to do it on their own. All stakeholders — including the federal government and state governments — have to play a role as quoted by the panelist of the Budget 2017 which consist of members from Rehda and MBAM.
1 of the highlights in the Budget 2017 is the Affordable housing for first time buyers. To create affordable housing, listed below are the plans:-
- For PR1MA projects development below RM300,000 or below, the government announced the step-up end-financing scheme to help increase home ownership among the lower income group – with no indication that it will be extended to the non-GLC development.
- Govt vacant lands at strategic locations will be given to GLCs and PR1MA to build 30,000 houses. The selling price RM150,000 to RM300,000. Again not for the non-GLC developer!!!
- Govt to build 10,000 houses in urban areas for rental to eligible youths with permanent job, Rental up to 5yrs, below than market rate. This plan is not benefiting the non-GLC developer either.
- The stamp duty for purchases of properties priced above RM1 million will be raised to 4% from 3% from Jan 1, 2018. Will this encourage the purchase of high-end properties?
Under the new budget, there will also be a 100% exemption of stamp duty given, but only for properties priced no more than RM300,000. Presently, a 50% exemption is given for the purchase of homes that are priced no more than RM400,000.
We should still look at the bright side. For those who have the intention of buying higher-end homes, the stamp duty increase from 3% to 4% for homes priced more than RM1 million will encourage advance buying of completed properties prior to Jan 1, 2018.
Overall, Budget 2017 does not benefit the non-GLC developers as it focuses on home ownership among the lower income group. Property prices hinge on numerous costs, the major one being land ,construction, compliance and labour. It does not seem likely property prices will come down anytime soon (for the time being) but there are many choices in the market and if you see any cheap property, just grab it!! How cheap is cheap?? You do the calculation according to your allocated amount from you income as you are a smart consumer. There is no straight forward answer.
Editorial references from thestar and theedgeproperty dot com.