James Wong, publicity chairman of the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector, told the news provider that the budget, along with macro-prudential measures taken by Bank Negara, would serve to temper volatility. He explained that the creation of a National Housing Council and the introduction of RM1bil in a public-private partnership would improve affordability and market oversight.
"The affordable housing model has to be tweaked to include pre-fab housing, releasing more land by government agencies and increasing urban area density, particularly in places near transport terminals in order to average out land cost," Mr Wong stated to The Star Online. "It is not that private developers do not want to build affordable housing. Land prices have gone up too high in the Klang Valley, Penang and southern Johor."
Indeed, the changes in the budget will position Malaysian property as a long-term investment, opposed to something to be flipped for a short-term gain. This is primarily down to changes in real property gains tax, which will come into effect on January 1st, 2014. The quantum increase will be extended from 15 per cent in the first two years of disposal to 30 per cent within the first three years of disposal. An additional five per cent tax will also be imposed on companies and non-citizens in the sixth and subsequent years.
Prior to the budget it was announced that foreign investors in Malaysian real estate located in Jahor would face a processing fee. State executive councillor for housing and local government, Datuk Abdul Latiff Bandi, revealed the measures, which are designed to protect Johorean interests, Bernama reported. The processing fee will be between four and five per cent of the property value purchased indirectly.