WE take cognisance of the fact that drawing up a budget is an arduous task and are appreciative and thankful of the Government’s vision to jump start the economy with the various goodies given in Budget 2022.
However, the proposed budget did not ‘meet the eye’ to provide the stimulus for the revitalising of the property market but left much to its own.
As real estate agents, we did not envisage this as it did not meet our expectations of stabilising the real estate sector especially in the secondary market amid a challenging market.
While we realise the budget detailed the need to take care of the rakyat especially those in the B40 segment, those in the M40 group has been somewhat left out.
The introduction of the Housing Loan Guarantee Scheme to help people with no fixed income and no proof of income to own a home – especially gig workers, small business owners, and farmers – is a laudable move as financing has always been a struggle for this group.
The issue of home ownership is a universal principal and in this respect, some assistance and support should have been given to the M40 group who have been left out. The M40 being a mid segment of the property market, plays a critical role in both new properties and the secondary market. Not all property owners are ‘strong financially’.
The property market contributed approximately RM119.08 bil in 2020 compared to RM162 bil in 2014, the lowest drop in the transaction value over the past six years and the longest drop in the history of the property market. Hence, revitalising the sector becomes critical.
Come end-2021, the loan moratorium and Home Ownership Campaign (HOC) will end, thus leaving a big vacuum for property owners/buyers. With the loan moratorium ending, this will have a significant effect as majority of the rakyat need to have a stable income to keep up with loan commitments. With insufficient support, we fear a systemic shock.
On the increasing numbers of abandoned projects, some measures need to be introduced to help buyers who are in a predicament of having to pay rent while also having to service interest on their ‘dream home’ which now requires more time to complete (if at all).
There are two sides to the HOC programme – that it benefits developers to sell their projects while buyers would appreciate the discounts and savings to finally own a home under the programme.
To care for the first time home buyers, perhaps the HOC can continue with a lowering of the price threshold from RM2.5 mil to RM1.5 mil so that first time home buyers can still get into the market in 2022.
We are nevertheless appreciative of the extension of the removal of real property gains tax (RPGT) after six years. When this was first introduced early 2021, there was positive movement in the secondary market transactions.
However, this is presently limited to three residential properties within the year. We await more clarity on this extension. This should be coupled with a stimulus for purchase to form a formidable impact on the property market.
The re-introduction of the tax incentive for commercial property owners who offer 30% discount on rents will assist existing tenancies to keep running thus enabling businesses currently in operation to enjoy some relief on their monthly cash flow as rentals and manpower are the two largest cost in an SME (small medium enterprise) business.
Meanwhile, the extension of up to RM300,000 tax incentive for renovations of commercial properties is notable to cater to the requirements of a safe office environment. – Nov 1, 2021
The Malaysian Institute of Estate Agents (MIEA) is a national body representing real estate practitioners in Malaysia. Established in 1974, it comprises of more than 6,500 registered real estate practitioners as members.
The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.
