MALAYSIA’s property sector, which was already in motion before the Budget 2022 announcement in anticipation of the extension of the Home Ownership Campaign (HOC), will remain upbeat in the coming months, said KAF Equities.
The analyst firm said residential transactions volume was already picking up significantly with a higher average transacted prices, thanks to the current low-interest-rate environment.
KAF said the series of measures announced in Budget 2022 will be a non-event except for the removal of the Real Property Gains Tax (RPGT).
“There is no announcement on the said extension (of the HOC). Instead, on the (Budget) proposals mentioned, we believe they would be a non-event (except for the removal of RPGT).
“There may be a short-term pullback in share prices from the current level, however, we remain positive on the sector as we believe that demand recovery would remain intact,” it said, in a report today.
As a result, the analyst firm maintains its “overweight” stance on the sector.
“We maintain our overweight stance on the sector. Property counters had run ahead of Budget 2022 in anticipation of extension of the HOC into next year.
“Recall that the main component of HOC was the waiver of stamp duty for properties purchases until end-2021. Despite of being silent on the extension of HOC, the stamp duty waiver would still be applicable for properties that are priced up to RM500k a unit until end-2025.
“Therefore, developers that are focusing on the affordable housing segment would still enjoy the strong demand flow from this initiative until end-2025, we believe,” it noted.
On the HOC, KAF said it would not discount the possibility for a off-budget HOC extension towards year-end (as we have witnessed at the end-May of this year).
“Furthermore, we believe that developers will continue to offer similar promotional campaigns during current HOC.”
The following measures were announced in the Budget on Friday:
- Affordable housing programme for low income earners worth RM1.5 bil.
- Credit guarantee scheme worth RM2 bil for those without fixed income (e.g., gig economy) to access home financing.
- Removal of RPGT from the 6th year of purchase onwards. – Oct 31, 2021
