Asian real estate technology group JUWAI IQI today released a reaction from the property industry to Malaysia’s proposed biggest-ever budget. JUWAI IQI Group CEO Kashif Ansari said:
Impact on First-Time Buyers
“Under this budget, we expect to see first-time homebuyers increase their share of the market by up to 5 percentage points. That would give them their highest market share on record. First-time homebuyers currently account for 28% per cent of subsale and 35% of new project purchases. That data comes from our Q3 2020 Malaysia Property Survey and Index. This is an excellent budget for first-time homebuyers and middle-income and lower-income Malaysians. Higher rates of homeownership will lead to greater wealth and financial security for young families in the decade to come. Homeownership is the ticket to greater wealth for families with relatively few other assets. It allows everyone to benefit from our country’s economic growth and climbing home prices.
Impact on Home prices
“According to our Q3 2020 Malaysia Property Survey and Index. The industry expects residential prices to fall 4.8% over the next year, before climbing again on the back of strong economic growth to register a 10.6% gain over the next 24 months. Under the proposed budget, you might see a floor under falling average prices which limits the decline to three or 4%.
What’s Next for MM2H?
“The property industry was looking forward to the government’s new plan for the Malaysia My Second Home scheme. MM2H is a job creator and brings new investment to the country. We hope the government will relaunch the program to make the approval process faster and more attractive for foreign property buyers that hope to make Malaysia their second home. When the government relaunches MM2H, we would like to see the program re-focused to generate more investment and jobs for Malaysians.
Key Budget Measures
“This is Malaysia’s biggest-ever budget, and it will help the country beat the pandemic and relaunch economic growth. It provides RM322.5 billion in total expenditures and targets economic growth of up to 7.5% in 2020.
“This is the COVID recovery budget, and its purpose is to support the people and revitalise the economy. Budget 2021 is primarily focussed on three areas: the welfare of the people, business continuity, and economic resilience.
“On the property front, the government has focused in on the policies that will best help first-time buyers. Malaysia has a young, fast-growing urban population that wants the security of owning their own home. We are thrilled the government is making it easier for Malaysians of all incomes to own a home. Real estate is one of the biggest drivers of wealth creation and financial security for families.
“The critical property-specific measures are RM1.2 billion for low-income house buyers, the rent-to-own scheme, and stamp duty exemptions on both the instrument of transfer and loan agreements for first time home buyers with property worth up to RM 500,000.
“The investments in the Singapore rapid transit link, MRT3 Circle Line, and the high-speed rail project will have multiplier effects by injecting billions into the economy and creating jobs. New infrastructure will open up new neighbourhoods for housing that are currently too poorly served by transit.
“As a company that strongly believes in leveraging technology, we believe RM1 billion digital transformation budget will help businesses leap forward in productivity and growth. That will lead to long-term growth in the property market as wealthier businesses and consumers invest in real estate. The pandemic has accelerated the growth of digitalisation, and these measures will help more companies adopt new technologies.”