More than 500,000 Malaysian can afford to purchase a RM 30 million (US$9.1 million) house!
This was reported by a prominent property developer recently!
Real Estate and Housing Developers Association (REHDA) deputy president Michael Yam said the property players achieved better sales after the government introduced incentives, including real property gain tax exemption effective April 2007 and the removal of Foreign Investment Committee approval.
The maximum tax on property gains was 30 per cent for individuals and corporations previously. Other positive factors include Malaysia´s improving economy, availability of loans to foreigners and no restriction to number of units that can be purchased.
"These factors contributed to renewed interests in the property market and have resulted in more enquiries which translated into better sales," he said.
He said unlike the typical residential-type property investor who seek returns in the form of rentals, buyers of high-end residential property are motivated by less tangible factors such as prestige, exclusivity or for speculation.
Property within RM800,000 to RM 1,000,000
The strengthening of the ringgit also augurs well for the high-end residential housing market, he said. Other analysts said the recent economic uncertainties, brought about by the subprime troubles in the US, has made foreign investors more cautious.
Some investors seem to be holding back on further investments until a clearer trend emerges.
"We´ve only just begun (to rally). Singapore´s property market has had a good run for the past two years," he said.
He believed the domestic housing sector should remain robust as long as US subprime mortgage problems are reined in. "It´s status quo for us as we expect Bank Negara to maintain interest rates at the current level," he said.
He said the recent 50 basis points interest rate cut by the US Federal Reserve was not likely to affect Malaysia´s property.
GOVERNMENT REGULATIONS: The government offers incentives to developers under the build-and-sell concept. The incentives include speedy approval of land matters and development plans. Such approvals normally take one to two years but will be expedited and shortened to four to six months. Developers who opt for the concept will also be exempted from paying the RM200,000 deposit and stamp duties.
In the Budget for 2008, Prime Minister Datuk Seri Abdullah Ahmad Badawi announced 50 percent stamp duty exemption on documents of transfer for the purchase of one house costing not more than RM250,000. The proposal is effective for sale and purchase agreements executed from Sept 8, 2007, to Dec 31, 2010. This measure will reduce the cost of purchasing a house by up to RM2,000. He also announced that the government will allow monthly withdrawals from savings at the Employees Provident Fund to service mortgages.
