The property sector in Malaysia is showing signs of optimism, with Bank Negara Malaysia (BNM) maintaining the Overnight Policy Rate (OPR) at 3% and stable employment conditions. Mah Sing Group Bhd founder and managing director Tan Sri Leong Hoy Kum expressed his confidence in the outlook of the property market for the year ahead. He believes that a stable benchmark interest rate will bring confidence to the real estate market, and investing in properties can serve as a good hedge against inflation.
Leong attributed this positive outlook to increased household spending, positive labor market conditions, and larger policy support. Malaysia’s economy grew by 5.9% in the second quarter of 2024, compared to 4.2% in the first quarter of the same year, as announced by BNM. This growth is reflected in the property market, with more than 104,000 property transactions recorded between January and March, representing a 17% increase compared to the same period in 2023. The total transaction value also rose by 37% to RM56.53 billion.
In light of these developments, Leong called for additional measures to support first-time home buyers, streamline the home-buying process, and accelerate the recovery of the property industry. He emphasized the significant multiplier effect that the property sector has on over 140 industries, which in turn positively impacts the overall economy.
One of the key measures Leong hopes the government will consider is reviving the Home Ownership Campaign (HOC) to help the rakyat secure their homes and promote homeownership. The incentives provided under the HOC, such as the 100% stamp duty exemption for properties priced from RM300,001 to RM1 million, have proven vital in helping home buyers secure their homes and reducing the housing overhang situation.
Leong also proposed the introduction of a 10% discount on the property purchase price for first-time home buyers and a one-off First-Time Home Buyers’ Grant of RM30,000 for properties priced up to RM500,000. These measures aim to lower the financial burden on first-time buyers, especially in urban areas where property prices continue to rise.
Additionally, Leong hopes the government will reintroduce tax deductions for housing loan interest, a policy that was previously in place in 2009-2010. This tax relief provided significant financial support to first-time home buyers by allowing a deduction of up to RM10,000 per year on interest paid on housing loans for three consecutive years.
In terms of reducing compliance costs and streamlining approval processes, Leong suggested measures such as reducing development charges, lowering land conversion premiums, and exempting utilities contribution charges. Simplifying regulatory processes and expediting approvals would help developers reduce project timelines and costs, ultimately making housing more affordable for the masses.
Lastly, Leong proposed enhancing tax reliefs and grants for developers who incorporate green building technologies and sustainable practices in their projects. By incentivizing eco-friendly construction methods, the government can support Malaysia’s environmental goals and drive the real estate sector towards more sustainable practices.
In conclusion, the property sector in Malaysia is poised for growth, and with the right policy support and incentives in place, it can contribute significantly to the overall economy and promote homeownership among Malaysians. It is crucial for the government to consider these proposals to ensure the continued development and sustainability of the property market in Malaysia.