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(File pix) To address some issues affecting the housing market, the government has presented some positive measures to stimulate the sector. Pix by NSTP/ Rasul Azli Samad
(File pix) To address some issues affecting the housing market, the government has presented some positive measures to stimulate the sector. Pix by NSTP/ Rasul Azli Samad

AGAINST the background of the slower global economic growth amid the trade tensions between China and the United States and the drop in oil prices, Malaysia’s economy this year is expected to expand at a slower pace compared to the last two years.

The World Bank has projected 4.9 per cent of growth for Malaysia for 2018 and lower rates of 4.7 per cent this year and 4.6 per cent next year.


The residential property market in Malaysia has been lacklustre since 2015 with annual declines in the volume and value of transactions, an increase in unsold houses and lower profits reported by some major developers.

Based on the latest available statistics released by the National Property Information Centre (Napic), the number of unsold completed residential units rose 48.35 per cent to 30,115 units from 20,304 units year-on-year up to September 30 last year while total value of these unsold houses increased 56.44 per cent to RM19.54 billion from RM12.49 billion.

These figures exclude serviced apartments and small-office-home-office (SoHo) units which, if added on, will increase the total unsold stock to 40,916 units worth a staggering RM27.38 billion.

To address some of the prevailing issues affecting the residential property market, the 2019 Budget introduces some positive measures to stimulate the residential property market, particularly the affordable housing segment.

Some of the measures:

• Stamp duty exemption on the first RM300,000 on the sale and purchase agreement and loan agreement for first time purchasers of houses priced RM500,000 and below for a period of two years till end-2020.

• Six-month stamp duty exemption effective January1for first-time buyers of units priced between RM300,000 and RM1 million.

• The launch of peer-to-peer (P2P) crowdfunding initiative to provide buyers an alternative source of funding to purchase a house. There is some degree of scepticism about this platform, and more details are needed on this programme to address the concerns of would-be house buyers as well as investors.

• A sum of RM1.5 billion will be set aside for the building of affordable homes targeted for the Bottom 40 per cent (B40) group. The plan is to build 100,000 affordable homes per year, starting this year although judging from the government’s past track record, the figures seem unrealistic. Nevertheless, with the new administration and new people at the helm, it is not impossible to achieve this lofty target.

• A further sum of RM1 billion will be provided by Bank Negara Malaysia to help first-time buyers with monthly income of less than RM2,300 to finance the purchase of homes priced less than RM150,000 at a lower interest rate of 3.5 per cent.

• An allocation of RM25 million by Cagamas will be used to provide mortgage guarantees for first-time buyers with monthly household income of less than RM5,000.

The latest good news is the announcement that all bank employees will enjoy zero per cent interest on their housing loans for the first RM100,000 of loan amount. This was included in the new collective agreement reached between Malaysian Commercial Banks Association and the National Union of Bank Employees.

While the measures are good news for potential first-time house buyers, will these be enough to spur buying activity in the market and help developers clear their unsold stocks?

It is noted that in the 2019 Budget there are also some initiatives that may negatively impact the property market—the five per cent Real Property Gain Tax (previously zero per cent for individuals and five per cent for companies and foreigners) imposed on properties sold after five years of ownership except for low- and medium cost and affordable homes of RM200,000 and below. There is also an increase in the stamp duty rate for properties above RM1 million which means that it has become costlier to buy properties of such price. As a concession, the government has recently announced the deferment of the new higher tax rate for six months, which means that the new rate will only take effect from July.

More in your print edition of NST today.

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