KUALA LUMPUR: The exemptions and initiatives, in particular the waiver of stamp duty on transfer instruments and loan agreements for residential homes, announced in the 2019 Budget are expected to kick-start the housing market moving into 2019 and beyond, says Knight Frank Malaysia Sdn Bhd.
Managing director Sarkunan Subramaniam said first-time homebuyers and the lower income groups were among the big beneficiaries of the budget.
He said among the measures benefiting first-time homebuyers would be the government’s approval for private-sector driven property crowdfunding platforms as an alternative source of financing.
“The availability of the crowdfunding platforms will make property more accessible for first-time homebuyers who may not easily qualify for bank loans.
“However, there is concern that this may fuel overly lenient lending policies, potentially leading to a future subprime situation, a lesson drawn from the United States where homebuyers with inadequate financial capacities were able to secure mortgages,” Sarkunan said.
Therefore, he urged the Securities Commission to ensure fund managers would be stringent when evaluating borrowers in the entire ecosystem of property crowdfunding platforms.
“There is also a need to prevent fund managers who might be tempted to quickly build portfolios by lending to borrowers with compromised credibility and possibly disrupting the platforms,” Sarkunan said.
He also said the two key budget announcements that directly impacted the property sector would be the review of rates for real property gains tax and stamp duty.
“Although the review of property taxes will increase the disposal and transfer costs, the impact towards the property market was insignificant.
“As an example, the stamp duty on the transfer of property valued at RM2 million will be RM54,000 prior to the revised rate and RM64,000 after the revised rate. For first-time home buyers purchasing a RM300,000 property, there will be savings of about RM5,000 on the stamp duty on the instrument of transfer,” Sarkunan said.
He said on the supply side, the Real Estate Housing Developers Association (Rehda) announced its commitment to reduce house prices by 10 per cent for new projects that were not subjected to price control following the Sales and Services Tax exemption on construction services and building material costs.
“While the commitment by Rehda members is neither binding nor enforceable but in the spirit of ‘Malaysia Baru’, they (the members) are likely to support the government’s aspiration to promote the National Home Ownership Campaign,” Sakurnan added. — Bernama