Whilst the country awaits the tabling of Budget 2022 on October 29th, there are a number of items that we have added to our wishlist with hopes to stimulate the property market, support homebuyers, provide relief for affected homeowners and initiate economic recovery.
If there is anything we have learned from the pandemic and the prolonged time indoors with our families, it is that home is more important now than ever before.
In a consumer sentiment survey for H2 2021, 73% of Malaysians said they are interested in owning, renovating or moving homes. More than 4 in 5 Malaysians said they intend to buy property in the future as well. It is clear that the demand is there and the government should be urged to recognize and support this.
There are three main points we feel Budget 2022 needs to address:
- Encourage first-time homebuyers and make homes affordable
- Relief for homeowners during the recovery phase
- Spur economic recovery by inviting foreign investment in property
Making homes affordable
High property prices are a leading setback for Malaysians that want to own their first home. Many believe there can be more done to make homes more affordable for the middle-class groups as well as lower-income groups.
A major factor that is pumping property prices up in the country is the inflation of material and development costs. To remain sustainable, the government needs to resist imposing further conditions and charges and regulate prices of building materials.
Furthermore, by amending the COVID-19 Act 2020, which protects the interests of those affected by the inability to meet construction obligations that are beyond their control, the impact of the pandemic on the market will also be subdued and subsequently improve property prices.
We applaud the government’s intention to build more affordable housing however there should also be an extension of the Home Ownership Campaign (HOC) that is set to end this year. It should also be extended to the sub-sale market to reach a broader pool of homebuyers.
Relief for homeowners
The government has provided rent waivers for those affected by the pandemic after the country saw the highest number of jobless people since the ’80s. The average unemployment rate in Malaysia is expected to stay at about 4.5% this year and though things are starting to look up, there are homeowners that are being forced to give up and sell their homes.
The following could be considered to ease the burden on homeowners in Malaysia:
- Income tax relief on interest accrued by home loans after the moratorium period ends
- An exemption or downward revision of RPGT on residential homes
- Rental incentives that benefit both tenants and landlords
Encourage foreigners to invest in property for a faster recovery
We commend the government for relaxing its rules for the existing MM2H (Malaysia My Second Home) programme participants. We hope that the government can remain consistent with its new announcement to remain a trusted and viable option for foreigners looking to own property and live in Malaysia.
Although the country is still in a recovery phase, the year 2021 showed surprisingly positive performance in the real estate market. You can read about how the East Malaysian market performed in this 1H 2021 market report - here.
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