KUALA LUMPUR (Feb 21): Malaysia’s current focus on affordable housing may cause an oversupply in this segment in the medium term, said Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia (PEPS) president Michael Kong.
“Encouraging homeownership among people in the middle to low income group is important but attracting foreign buyers to invest in high-end properties is equally important to create a vibrant real estate market. We [Malaysia] shouldn’t isolate ourselves from the international market,” he told EdgeProp.my on the sidelines during the 12th Malaysian Property Summit 2019.
The summit was organised by PEPS while EdgeProp.my is the media partner of the event.
Kong said the current market is experiencing various challenges such as overhang properties, tight loan availability, poor state of property management and property affordability — issues which need all stakeholders in the industry especially policy makers, to understand and come up with holistic solutions.
Citing the move to turn the Real Property Gains Tax (RPGT) into an evergreen tax, Kong said residential and commercial property owners who sell their properties now are required to pay the 5% property gains tax regardless of the owning period. Although this may be effective to curb property speculation, it could reduce the country’s attractiveness to foreign investors of commercial properties in Malaysia.
“Compared with neighbouring countries such as Singapore and Hong Kong, Malaysia’s commercial property market still lacks vibrancy in terms of price growth and transaction numbers. We are not so attractive in the global market,” he noted.
Commenting on housing affordability and property overhang, Kong said innovative solutions are needed to resolve these issues such as policies that provide ease in renting or that encourage rent-to-own.
The government, he added, should also review the current bumiputera units release mechanism as part of the property overhang problem could be resolved if there is greater transparency and clearer guidelines on the release mechanism.
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