The Malaysian Institute of Real Estate Agent has called on Budget 2022 as a dampener mainly due to its lack of incentives to revitalise the property sector.
With HOC now considered a no-show, the secondary market is also finding the budget to be missing key elements that can spur the market. It notes that while the budget detailed the need to take care of the B40 segment, those in the M40 have been somewhat left out.
MIEA pointed out the need for the introduction of the Housing Loan Guarantee Scheme to help people with no fixed income and no proof of income to own a home especially gig workers, small business owners, and farmers on the difficulties of getting housing loans is a laudable move as financing has always been a struggle for this group.
As for the M40, the institution says they are an important sector that caters to the mid-segment of the property market and they play a critical role in the new properties and the secondary market. Not all property owners are ‘strong financially’. The property market contributed approximately 119.075 billion in 2020 compared to RM162 billion in 2014, the lowest drop in the transaction value over the past six years and the longest drop in the history of the property market and as such revitalising it becomes critical.
Come end 2021 the moratorium and HOC will end leaving a big vacuum for property owners/buyers. With the loan moratorium ending, this will have a significant effect as the majority of the Rakyat need to have a stable income to keep up with loan commitments and most businesses have not returned to normal as hoped. In fact, with insufficient support, MIEA fears a systemic shock and suggests for the Loan Moratorium or Interest Only Loan payments which need not be presented in the country’s budget be given serious consideration. On the increasing numbers of abandoned projects, some measures need to be introduced to help the buyers who are in a predicament of having to pay rent where they are and also to service interest on their ‘dream home’ which now its time to complete is in limbo.
It has also asked as to care for first time home buyers and continue HOC by lowering threshold price from RM2.5million to RM1.5million so that the first time home buyers can still get into the market in 2022. The reintroduction of the tax incentive for commercial property owners who offer 30% discount on rents will assist existing tenancies to keep running and the businesses currently in operation to enjoy some relief on the monthly cash flow as rents and manpower are the 2 largest costs in an SME business.
The extension of the up to RM300,000 tax incentive for renovations of commercial properties is notable to cater to the requirements of safe office environment.
