Incentives can help stimulate property sector
Update Date：2016-10-20 9:42:48 Source：Tannet (Malaysia) Sdn Bhd Views：635
KUALA LUMPUR: The local housing market is stabilising but it may not be at the bottom just yet. Industry players are expecting the market this year and next to remain slow because of global sentiments but they believe the upcoming budget may accelerate things a little. Eco World Development Group Bhd president and chief executive officer Datuk Chang Khim Wah said the market has seen negative sentiments plaguing property buyers and aspiring house owners. “If you look at Malaysia’s gross domestic product (GDP) rate in the last two years, it is still relatively good compared to many other countries. Malaysia’s GDP is doing about four per cent compared to a lot of other countries. It is not the end of the world for Malaysia. “Unemployment is still low and manageable. The wages are going up, perhaps not as fast as against the cost and pricing. “But it’s improving. A lot of the Gen Y have good jobs even though they are just starting. People keep dumping in negativity and that is dampening the market. Even if the person has the money, they may delay their decision to buy because of the environment. “It is surprising that the market perception of this is not really translated through,” he said at Business Times’ pre-budget roundtable discussions, here, on Monday. Chang said there is some negativity in the market due to global sentiments but as a property developer, it is unperturbed because its focus is on the young population who are looking to buy their first house. “The average population in Malaysia are still young and likely to be that way for another five years. We are a growing nation that needs houses. Our workforce are probably the second highest in Asia just behind the Philippines. “We have more than 13 million employees in the market. Housing supply is about 4.9 million so there is actually a bit of disparity between the number of employees and housing stock. “As a developer, we must address demand and supply issues. We have to know the location of these demand and how to address the supply.” Chang said there is strong buying power in the market and further excitement must be created to spur interest. He believes the 2017 Budget may offer some incentives, especially for first-time house buyers and the middle-income group. “Property transactions have fallen in the last two to three years not due to lack of interest from people or investors, but because of end-financing issues. “If you look at some of those launches by developers, Eco World for example, the level of interest is still very strong. You can still get people coming in, selecting their units and putting their money down. “The problem is getting their loans approved. It’s either because they have outstanding loans and bad credit, or their net income is low. “Due to that, the withdrawal rate has risen from 10 per cent and 20 per cent to up to 60 per cent. I think this is where the government should come in and assist the industry and pay attention to the segment that needs help the most,” he said. Malaysian Institute of Estate Agents (MIEA) immediate past president Siva Shanker said there are structural issues affecting the market such as the real property gains tax (RPGT). “The RPGT has changed so many times, even we do not know what is applicable today. The government must be consistent with its policies. Otherwise, it would scare investors away. “Everybody wants certainty. If I’m going to buy a property today, then I would like to know that in five years’ time I can do with it what I plan to do this year. “You cannot tell me five years later suddenly that I cannot sell it and I have to keep the property for the rest of my life. You cannot change policies because if you keep doing that, as an investor I am afraid of you. I am worried what you will do to me tomorrow,” said Siva.
Previous：Insurance sector ripe for disruption
Next：Making the REIT investments