Many property developers are optimistic that Budget 2015 will boost Malaysia’s real estate sector as first-time buyers benefit from the extension of the 50 percent duty exemption and from the raising of purchase limit from RM400,000 to RM500,000 through the end of 2016, reported the media.
From 2016 onwards, Malaysia will also move to self-assessment for property gains tax.
In its latest MarketView report, CBRE noted that Greater Kuala Lumpur’s residential and commercial property markets are expected to witness healthy growth. While new residential projects are entering the market at a slower pace compared to last year, it would raise the current supply of homes to around 1.79 million units.
For this year, CBRE expects greater interest in both the primary and secondary property market particularly for homes found in good locations, albeit a recent survey indicates that most Malaysians are not willing to spend over RM500,000.
Despite the excitement, Malaysian Real Estate and Housing Developers Association President FD Iskandar warns that the country’s blue-ribbon Iskandar special economic zone could face oversupply problems.
Patterned after the Pearl River Delta Economic Zone, Iskandar is three times the size of Singapore. Over the past few years, it has become a property hot spot for Singaporeans, with CapitaLand being a major developer along with China’s Country Garden.
In an interview, FD Iskandar noted that if buyers farther away from the special economic zone do not acquire up to 50 to 60 percent of the 30,000 units set for completion in two to three years’ period, then this may put pressure on rental yield.
On the bright side, FD Iskandar said landed homes will continue to perform well, while Singaporean investors will continue to be interested in industrial properties.