2020 Budget gives hopes to home seekers, stakeholders - PropertyGuru

Last update: 14/10/2019

KUALA LUMPUR, Oct 14 -- The 2020 Budget has given home seekers, developers and other industry stakeholders reason to look to the future with some hope, said online property portal PropertyGuru Malaysia. 

Its country manager, Sheldon Fernandez said the inclusion of specific provisions targeting issues such as first-time house ownership and the country’s residential overhang, such as the extension of the Home Ownership Campaign, is much-needed steps in restoring confidence in mid-range housing, as well as the residential sector as a whole.

"Meanwhile, the budget’s rent-to-own allocations, as well as the extension of the Youth Housing Scheme to next year, serve to ease the burden on the B40 segment, as well as younger home purchasers.

"Labour-centric provisions and reform, along with macroeconomic boosters will raise overall income for Malaysians, tackling affordability from the bottom up.

“However, this is a long-term play that will take time to impact home seekers," he said in a statement.

The 2020 Budget’s focus on education, including funds to upgrade existing schools with new ones to be built in Langkawi, Kulai, Hulu Langat, Putrajaya, Pasir Gudang, Tumpat, Marang, and Johor Bahru is good news for surrounding properties.

Similarly, Fernandez said “face-lift” provisions such as allowances to repair and refurbish low and medium-cost strata public housing, as well as the Safe City Initiative, is a feel-good factor for property as a whole.

"Provisions and feasibility studies for Carey Island in Selangor and the Kota Perdana Special Economic Zone in Kedah would have catalysing impacts on economic activity in surrounding areas, but their impact on property will be muted in comparison to mega projects such as the Mass Rapid Transit (MRT) and KL-Singapore High-Speed Rail (HSR),” said Fernandez.

He also said infrastructure provisions such as discounts and abolishment of tolls along PLUS highways, as well as introduction of electric buses in some cities and petrol subsidies across the board, will facilitate and improve connectivity, with trickle-down effects for property.

However, maintenance of routes must be upheld for the policy to be effective in the long run, he added.

The allocation of RM10 billion for rent-to-own schemes for first-time home seekers is a step in the right direction, as an alternative financing platform to help home seekers with the upfront costs of purchasing a property. 

Besides, he said the extension of the Youth Housing Scheme to Dec 31, 2021 will help younger purchasers in owning their first homes, addressing a demographic in need. 

On another matter, he said the move to reduce the foreign ownership threshold from RM1 million to RM600,000 is an interim measure to address the ongoing residential overhang in the country. 

"However, domestic sentiment must be balanced against the short-term benefit of reducing the oversupply, as external intervention is not an ideal solution," he said.

Finally, the revision of the base year of acquisition for Real Property Gains Tax (RPGT) from Jan 1, 2000 to Jan 1, 2013 would soften its impact on sentiment at higher tiers of the market. 

However, he added its continued application will be a concern for investors and other stakeholders in the property value chain.