FINANCE Minister Lim Guan Eng’s maiden Budget, which carries the theme ‘Credible Malaysia, Dynamic Economy, Prosperous Rakyat’, is less painful than expected.
Rumours had been circulating in the weeks leading to the 2019 Budget tabling on November 2 that it would be a tough budget that would have new taxes, adding a burden to the property market.
Although there are not much goodies which property developers had hoped for to help stimulate the sluggish real estate market, the good news is that no new taxes were announced.
Henry Butcher Malaysia described the 2019 Budget as “mildly positive” as it does contain some goodies.
In the 2019 Budget, Malaysia’s economy is projected to grow at a slower pace of 4.8 per cent this year and 4.9 per cent next year compared with 5.9 per cent last year. This expectation is on the back of slower global economic growth of 3.7 per cent seen for this year and next.
“Positive growth (forecasts) of 4.8 and 4.9 per cent next year and 2020 respectively is supportive of a stable property market.
“The larger budget deficit may temporarily affect the country’s financial standing and international credit rating evaluations of Malaysia, but the greater transparency and determination to clean up the excesses and wrongdoings of the previous administration and steps being taken to put the country’s economy on a sound and firmer footing augurs well for the future.
“We certainly look forward to all these measures leading to a speedier but more orderly recovery of the property market,” said Henry Butcher.
Several major infrastructure projects have either been cancelled or postponed such as the Mass Rapid Transit Circle Line (MRT 3) and the Kuala Lumpur-Singapore high-speed rail (HSR).
Nevertheless, the government has decided to move ahead with some other projects, such MRT Sungai Buloh-Serdang-Putrajaya after a 23 per cent cost reduction and Light Rail Transit Line 3 after the cost was slashed by 47 per cent. At the same time, the Klang Valley double-track railway project will be retendered on an open-tender basis hoping that the cost could be brought down significantly.
“This is certainly sweet news to property developers who have purchased land along these rail lines to take advantage of the enhanced accessibility, as well as investors or house buyers who have invested in properties near the proposed stations along these lines in the hope of enjoying strong capital appreciation when these rail lines become operational,” said Henry Butcher.
The Real Estate and Housing Developers’ Association said amid plans to manage Malaysia’s budget deficit, the government had given due consideration to some of its proposals.
“We thank the government for the allocations and incentives that will surely benefit the rakyat, the industry and the country as a whole,” it said.