An easing of growth is already being noted and in the first six months of the year there was an overall 12.6 per cent decline in residential transactions in Malaysia year-on-year. Falls were even greater in some of the top hubs of Kuala Lumpur, Selangor and Penang, with drops of 47.5 per cent, 16.2 per cent and 28.1 per cent noted. Elsewhere, Jahor recorded a 4.9 per cent increase.
Rahim & Co executive chairman Datuk Abdul Rahim Rahman said: "A lot of foreigners paid ten per cent deposit, but did not go through with the sale due to the economic downturn." This has had an effect on construction too. "New property launches will face more challenges, but developers will respond in more creative ways to manage the expected slower take-up rates," Mr Rahman added.
The government's introduction of more stringent property measures are certainly needed, however, and experts received the reforms largely positively. Following Budget 2014 James Wong, publicity chairman of the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector, told The Star Online that the changes will serve to tackle volatility. In particular, the introduction of RM1bil in a public-private partnership would improve affordability and market oversight. "It is not that private developers do not want to build affordable housing," Mr Wong said. "Land prices have gone up too high in the Klang Valley, Penang and southern Johor."
The reforms are also hoped to prevent property flipping, which has been behind property growth in recent years. Changes to real property gains tax will come into effect on January 1st, 2014 and see the quantum increase extended from 15 per cent in the first two years of disposal to 30 per cent within the first three years of disposal.