New measures give buyers, developers hope

THE 2020 Budget has provided hope to developers, house buyers and industry stakeholders, said PropertyGuru country manager Sheldon Fernandez.

He said the revision of the base year of acquisition for real property gains tax (RPGT) from Jan 1, 2000 to Jan 1, 2013 will soften the impact on higher tiers of the market, but its continued application will be a concern for investors and other stakeholders in the property value chain.

He said provisions targeting issues, such as first-time home ownership and the residential property overhang like the extension of the Home Ownership Campaign (HOC), are much needed to restore confidence in mid-range housing and the sector as a whole.

“Labour-centric provisions and reforms, along with macroeconomic boosters, will raise the overall income for Malaysians, tackling affordability from the bottom up. However, this is a long-term play which will take time to impact home seekers,” said Fernandez.

He also said the allocation of RM10 billion for rent-to-own (RTO) schemes for first-time house buyers is a step in the right direction as an alternative financing platform.

PropertyGuru country manager Sheldon Fernandez.

The RTO scheme offers buyers the option to rent for five years and apply for end-financing to purchase the house in the sixth year based on the price fixed at the time the tenancy agreement is signed.

Knight Frank Malaysia managing director Sarkunan Subramaniam said the RTO may be able to address the overhang issue of condominiums and serviced apartments.

He hoped the RTO would help increase home ownership among Malaysians, in particular the lower-income group.

“We applaud the great initiative by the government to continue with the RTO scheme. However, there is concern that the property sold may include the expected capital gain, which may lead to higher a property price compared with the current market value. This scheme has to be regulated and fairly practised by the public and private sectors.”

Sarkunan hopes there will be more initiatives to maintain the momentum in the recovery of the housing market.


The Real Estate and Housing Developers Association Malaysia (Rehda) president Datuk Soam Heng Choon said every Malaysian should have a place to call their own.

Rehda welcomes the government’s decision to extend the HOC until Dec 31, but hopes there will be more incentives to spur the industry, said Soam.

“We were encouraged by the decision from Bank Negara Malaysia to expand the eligibility criteria for its RM1 billion fund for affordable homes to include household incomes of up to RM4,360 from RM2,300, and with house price set at RM300,000. This will enable more of the B40 group to benefit.”

Soam said decreasing the foreign home ownership threshold for strata properties to RM600,000 is positive for the industry.

“Although limited to a one-year period next year and specific to only urban areas, we foresee that it will alleviate the issue of unsold units. We call upon the federal government to ensure the support of state governments in implementing the threshold limit as this is a matter where the states have the final say.”

Titijaya Land Bhd Group managing director Lim Poh Yit said the government’s initiative to reduce the threshold for foreign buyers will increase the sales of unsold high-rise units.

“Most of our offerings fall in the price range of RM600,000. We are encouraged by the new developments and shall wait for further details so that we can work towards our common goals together with the government and the nation.”

Titijaya Land Bhd deputy group managing director Lim Poh Yit.

On the RTO scheme, Lim believes it would help to reduce the burden of young working adults and families, and enable them to own a home.

In addition, waiving the stamp duty for ownership transfer between the developer and bank as well as between the buyer and the bank is a good move to rejuvenate the industry, he added.


Mah Sing Group Bhd founder and group managing director Tan Sri Leong Hoy Kum said there is a growing interest in Malaysian properties from foreign buyers and hopes the market will continue to be resilient and maintain a steady growth.

He said Mah Sing will benefit from the reduction in the price threshold as it has properties that appeal to foreign buyers.

He said foreign buyers are a blue-ocean pool of potential buyers who can reduce the overhang of properties in this price point.

“It is crucial that state governments respond to this positively and revise their ceiling prices accordingly. We have recently showcased 10 of our projects which are most desirable to foreign buyers at a private event in Hong Kong, and the encouraging response showed that our properties are competitive at the international level.”

Leong said Mah Sing will continue to promote its properties in Kuala Lumpur to overseas buyers.

He said there are also high-rise products in Penang which will appeal to foreign buyers.

“We appreciate the government’s willingness in to listen to feedback and improve the RPGT policy. We hope continuous improvements to the RPGT policy will be considered to boost interest and activities in the secondary property market, as many buyers are looking to upgrade.”

Lower property price ceiling for foreigners: Crunch your numbers here

PETALING JAYA: The Budget 2020 announcement that the threshold for foreign ownership of high rise property would be lowered from RM1mil to RM600,000 caught many by surprise.

However, there were mitigating circumstances for that decision. For one, it opens up to foreign owners, at least 3,938 units of condominiums and apartments worth a total of RM4.85bil, figures from the National Property Information Centre (Napic) show.

The move, according to an Oct 13 statement from Finance Minister Lim Guan Eng, will take effect for a period of one year from Jan 1, 2020.

However, the Napic Report also shows that the combined overhang for two other types of high-rise properties – serviced apartments and Soho (Small office home office) – amounted to 19,856 units worth a total RM15.33bil.

Contacted for clarification on whether the Budget 2020 announcement only covers condominiums and apartments, or also includes serviced apartments and Soho units as well, a Finance Ministry spokesman said everyone should stick to Lim’s Oct 13 statement.

Lim’s statement, the spokesman noted, “was only applicable to existing apartment and condominium units that have still not been sold.”

However, Real Estate and Housing Developers’ Association (Rehda) president Datuk Soam Heng Choon said they believed that the Budget 2020 announcement would cover all high-rise strata residential properties.

“This means that the reduction in threshold price would cover high-rise condominiums, apartments, serviced apartments, and Soho,” he said.

Soam said despite the Budget announcement, state authorities still had the power to set the threshold price for foreign buyers of properties since land was a state matter.

He noted how some state governments including Selangor had announced that they would review their threshold limits following the Budget announcement.

The current threshold in Selangor for foreigners to own property is RM2mil.

“However, we also feel that areas in the Federal Territories such as Kuala Lumpur that are under the jurisdiction of the Federal Government will likely go ahead and implement the threshold reduction to RM600,000 from RM1mil,” he added.

Figures from Napic – a body under the Finance Ministry’s Valuation and Property Services Department – shows that Kuala Lumpur leads the pack with RM2.05bil worth of unsold condominiums and apartments priced at RM600,000 and above per unit. Penang is second (RM1.27bil), followed by Johor (RM821.9mil), Selangor (RM333.4mil) and Sabah (RM197.7mil).

For serviced apartments priced RM600,000 and more, Johor leads in terms of the total value of unsold units at RM9.7bil, surpassing Kuala Lumpur where the overhang value amounted to RM2.3bil in the second quarter of this year.

For Soho, Kuala Lumpur tops in terms of the total value of unsold units with a RM142.3mil overhang for units priced at RM600,000 and above. Johor is next with RM90.7mil, while Selangor with RM34.3mil is in third spot.

While the announcement has drawn debate in the country, it is certainly good news for foreigners eyeing a spot under the Malaysian sun, as with Hong Konger Ginny So, who bought her first condominium in Penang on the third day of her first holiday to Malaysia some 10 years ago. However, it’s not just the affordable property prices that is drawing So to Malaysia.

In Johor, Chinese national housewife Ng, 46, cheers the lowering of the threshold. “My husband and I bought our first property in Johor earlier last year but we do not have many options to choose from as we need to ensure that the price of the property is over RM1mil.

“With this move, I believe more foreigners will buy property here as it is more affordable and there will also be a greater selection of homes we can choose from,” she said.


Budget 2020: Reducing property overhang, improving accessibility

KUALA LUMPUR: The government will lower the threshold on high-rise property prices in urban areas for foreign ownership from RM1mil to RM600,000 in 2020.

Finance Minister Lim Guan Eng said in his budget speech that the move will work towards reducing the supply overhang of condominiums and apartments, which amounted to RM8.3bil as at the second quarter of 2019.

Addressing also the public opinion over the Real Property Gains Tax (RPGT), the government will revise the base year for asset acquisition to Jan 1,2013, from the previous base year of Jan 1,2000.

Previously, the RPGT valuation on property purchased before the year Jan 1,2000, was calculated from Jan 1,2000 onwards. Under the new ruling, properties bought before Jan 1,2013, would be valuated from Jan 1,2013.

Among other initiatives, the government will also extend a Youth Housing Scheme administered by Bank Simpanan Nasional from Jan 1,2020 to Dec 31,2021.

Included in the scheme, the government will also offer a 10% loan guarantee through Cagamas to enable borrowers access to full financing while providing a RM200 monthly instalment assistance for the first two years, limited to 10,000 home units.

The Finance Minister also mentioned ongoing initiatives such as the Fund for Affordable Home, which was launched in January 2019 to help the lower-income group purchase their first homes at a concessionary interest rate of up to 3.5%.

On September 1,2019, the value of properties covered under the fund was increased to RM300,000 from RM150,000 previously.

Those eligible include households with a maximum income of RM4,360, representing the threshold income for the B40 group.

“As of September 2019,2, 840 applications amounting to RM472.7 million have been received. The approval rate is 77.9%, with 982 applications amounting to RM156.2 million being approved,” said the Finance Minister.

Meanwhile, the government has extended the the Home Ownership Campaign by six months to Dec 31,2019, whereby developers providing a discount of at least 10% for qualified properties will be matched with stamp duty exemptions.

Lim added that the government will collaborate with financial institutions in introducing Rent To Own Financing schemes, where up to RM10bil will be provided by financial institutions with support form the government via a 30% or RM3bil guarantee.

SMD 3rd flagship SKIP

With full speed a head with of our construction in phase 1, this is going to be a testing phost

SMD 2nd flagship SKIP

With full speed a head with of our construction in phase 1, this is going to be a testing phost

SMD first flagship SKIP

With full speed a head with of our construction in phase 1, this is going to be a testing phost