The rate at which property prices in Malaysia have been growing are starting to slow as new governmental rules start to take effect. It was reported recently that the leaders in the nation were looking to implement cooling measures to stop the sort or speculative buying and slipping that has seen prices accelerate at an unsustainable level in the past few years, and the South China Morning Post has reported that this is now starting to have the desired effect.
The UAE was one of the first markets to implement cooling measures last year after its property prices started to escalate at breakneck speed, and Malaysia has followed suit by increasing capital gains tax among other steps. “The days of being able to buy a property in Malysia without putting any money down and, in two years, selling it for a 30 per cent profit - those days are absolutely over,” Malaysian Institute of Estate Agents president Siva Shanker was quoted as saying by the news source.
As well as the rise in capital gains tax, the other cooling measures introduced include upping the lowest level at which overseas investors can buy property in Malaysia. This was doubled towards the end of last year to RM 1 million (£180,000) to allow better access to cheaper properties for Malaysian people and to halt the false inflation of prices of these types of homes. The government also looked to ban the continued use of the Developer Interest Bearing Scheme (DIBS), which permitted developers to buy new property without having to make any progressive payments over the course of construction.
These rules were brought in to try to bring an end to the types of growth seen in the nation throughout 2012, when property prices accelerated by some 12 per cent in the space of less than a year. Mr Shanker said: “The fundamentals cannot hold that sort of growth. If we'd carried on at that level, the market was going to crash - inevitably, the proverbial bubble would burst,” he said, though he added that this opens up opportunities in the secondary market.