THE stamp duty waiver announced by the Government recently is expected to have minimal impact on the prospect of the overall Malaysia property market.
In RHB Research’s view, on-going market headwinds such as rising inflationary pressure and weakening of the ringgit will continue to dampen market sentiment.
“Coupled with the expectation of higher interest rates ahead, potential home buyers may defer their purchase of big-ticket items over the next six months,” reckoned analyst Loong Kok Wen who reiterated a “neutral” outlook in a property sector update.
On Friday (July 15), Prime Minister Datuk Seri Ismail Sabri Yaakob said stamp duty exemption will be offered to first-time home buyers for property priced up to RM500,000 while a 50% discount on stamp duty is applicable for properties priced from RM500,000 to RM1 mil.
The exemption, which is part of the Keluarga Malaysia Home Ownership Initiative (i-MILIKI) is somehow similar to the features in the Home Ownership Campaign (HOC) that ended in December 2021 whereby stamp duty waiver was offered for properties priced up to RM1 mil.
Although the recent announcement may help to slightly spur demand, especially for properties priced at RM500,000 and below, RHB Research expects the impact to the overall property market to be fairly minimal.
“We think prevailing concerns on macroeconomic headwinds will deter demand for property over the next six months,” opined RHB Research. “We also note that some of developers are still offering stamp duty waiver for certain products as a continuation of the HOC in order to stimulate demand.”
While demand-driven incentive has been re-introduced, the research house expects cost pressure to remain a big concern for developers as building material prices remain at high levels while labour shortage issues have yet to be resolved.
“Therefore, we foresee potential downside risk to developers’ earnings in the coming quarters,” RHB Research pointed out.
Among the developers under its radar, the research house expects Mah Sing Group Bhd, LBS Bina, Matrix Concepts Holdings Bhd and Tambun Indah Land Bhd to benefit from the incentive as these developers have relatively high exposure (>60%) to property products priced below RM500,000.
“Potential benefits to the bigger players may not be that significant as mid-range products make up a smaller percentage of their overall portfolio,” added RHB Research. – July 18, 2022
