Ahead of Budget 2022 which will be tabled on 29 October 2021, PropertyGuru Malaysia, Malaysia’s leading property website, has several items on our wish list that we are proposing to the government to further support the recovery and growth of the property sector.
Encouraging First-time Homeownership
As Malaysia continues its journey to recovery, Budget 2022 should be aimed at making homeownership viable to the B40 and M40 groups. While more than 4 in 5 Malaysians intend to buy a property in Malaysia in the future, the high property prices are a major deterrent for home seekers, according to PropertyGuru’s Consumer Sentiment Study H2 2021.
Although the government has introduced various financial aids to provide relief to Malaysian property owners and support the property sector, the same study found that 84% of Malaysians believe more can be done by the government to make housing affordable, and 58% want the government to extend the Home Ownership Campaign (HOC) to subsale properties.
The HOC has helped many first-time homebuyers purchase a property in the last few years and has been successful in encouraging activity in the slow property market. We hope that the government will not only extend the HOC to next year but also extend the incentives offered under the campaign to the secondary residential market. Based on recent analysis from our data analytics and solutions arm, PropertyGuru DataSense, the secondary residential property market has been growing steadily over the past few years. Despite the pandemic’s impact on the overall number of property transactions, it has nevertheless accelerated the popularity of subsale transactions throughout 2020 and now in 2021. Hence, if the HOC is extended to the secondary market, it will provide a big boost to the housing market and encourage more first-time homebuyers to consider subsale properties, especially as the stamp duty exemption can help reduce the upfront cost related to home purchases.
Aiding Current Homeowners
Aside from supporting first-time homebuyers, there is also a need to assist those who are struggling to keep their homes during the pandemic. We applaud the government’s initiative of providing rent waivers for affected groups and extending the moratorium on rental payments for the People’s Housing Project (PPR) as part of the Malaysian Family welfare agenda on housing, but more can be done for those who are in the ‘sandwich’ group between B40 and M40. We urge the government to consider providing income tax relief on interest accrued by home loans after the moratorium ends, as this would help ease the household burden of those in need.
Besides that, we believe it is necessary to alleviate the burden of those who have to sell their homes in this difficult time. We hope that the government either extends the exemption of RPGT on residential homes next year or revises it downwards while Malaysians and the property market are still in the process of recovery. The extension would help alleviate the struggles of homeowners, otherwise the RPGT may be an additional burden on households who have been forced to sell their home as a means to survive. In addition, this can stimulate the property market by encouraging buying and selling of residential homes.
We also hope that the government can introduce rental incentives that can be beneficial to both tenants and landlords. For example, the New South Wales government in Australia introduced financial incentives that can be claimed by landlords who provide a rent reduction to tenants impacted by COVID-19. A similar measure can be implemented in Malaysia to help support tenants who are experiencing loss of income due to the pandemic and are unable to pay their rent temporarily. This incentive can also help tide landlords over financially, so they do not need to resort to selling their property or evicting their tenants, potentially leaving their tenants homeless.
While it’s important for Budget 2022 to address the current challenges faced by Malaysians and the property sector, we should not lose sight of the equally important long-term agenda of promoting sustainable urban living. As a company that’s committed towards sustainability and the fight against climate change, it is encouraging to see that the current administration is committed towards prioritising green and resilient urban development based on the 12th Malaysia Plan, and we hope that this priority is also reflected in the national budget.
More incentives are required to spur green development in the country and encourage developers to adopt accredited green certification tools, such as the Green Building Index (GBI) and the Malaysian Carbon Reduction and Environmental Sustainability Tool (MyCREST) during the construction and operation phases of development projects. The government should provide additional tax reduction to green-certified buildings, so developers can benefit from income tax deductions equivalent to the additional capital expenditure needed to obtain the green certification.
From a consumer’s standpoint, more than 9 in 10 Malaysians consider it important to live sustainably according to PropertyGuru’s Consumer Sentiment Study H2 2021 findings. The study also found that 71% Malaysians regard developers’ use of sustainable materials as important to them. However, as the cost of constructing green buildings are typically higher than traditional buildings, even if the differences are covered in the long run, this might deter potential homebuyers from making the purchase. Hence, the government may also consider providing stamp duty exemption for homebuyers who purchase green-certified properties to drive the demand.
At PropertyGuru, we are ever ready to collaborate with the government and provide them with insights to make informed decisions that can help drive a healthy recovery and sustainable growth of the nation’s property market.
Statement to be attributed to Sheldon Fernandez, Country Manager, PropertyGuru Malaysia