Property Market to Lead the Way under New Budget
BY GAVIN TEE
The public has been heavily speculating on the upcoming Budget Talks, as concerns were focused on whether the government would adopt an aggressive approach to sustain and save the Malaysian economy after the downturn. According to Gavin Tee, a Real Estate Investment Consultant & Managing Director of Arborland & Co (Real Estate Agency), the general public should not be expect too much and neither too many surprises in the government policy compared with recent years.
“I believe that a surprising and aggressive stance by the government would not come around this time. This is because the government has already injected mini budget allocations for the past year.”
“However, one positive view is that this would be our new Prime Minister Dato Seri Najib’s first involvement in the financial budget. I believe in his determination to reform the nation’s economic condition,” he added.
He explained that the new PM is very well versed in the trends of globalization and cross border investments.
“Dato Seri Najib is well aware that these transactions are crucial and must be his first priority. Hence, he will be eager to make policy changes to meet the world standards.”
According to Gavin, the government’s focus may be on several areas. “The key area should be on the construction sectors involved in infrastructure and real estate development. However, I hope to see such mega projects develop according to the main economic principles and ensure the effectiveness of the project. In the past, failures do occur because of favoritism.”
He also commented that the property sector could be a boost towards the economy. “If you look at geographic statistics, Asia’s economic growth is led by the property and real estate market, especially China and Singapore. I believe that the Malaysian Real Estate market can easily be the leader for recovery as our market has yet to be aggressively involved in the cross border and international property ring.” He also added that the Malaysian property price is still one of the lowest in the region, hence there is a great potential for the sector to grow.
When asked for suggestions in reviving the economy, Gavin said “We should look into the government assets, whereby there are ‘white elephants’ or abandoned projects and under utilized government buildings. The government could increase income by privatizing or leasing such properties by offering the incentive to the private sectors in the budget. These sectors would then have the initiative to contribute in offsetting the deficit.”
“The government should not impose higher taxes, but to increase their spending and create an active economy in order to generate more revenue. For example, there were remarks on resuming Real Property Gains Tax (RPGT). Gavin thinks the government should not reintroduce it as it will heavily slow down the property transactions and affect the stamp duty revenue. The loss of stamp duty could be higher than the collection of RPGT. Furthermore, imposing RPGT will have a negative impact to the real estate market. The decrease in property prices will seriously yet again lower down the collection of stamp duty.”
In addition, Gavin proposed to waive the stamp duty for properties valued at RM300,000 and below, particularly in the city centre as a medium-low cost property in the city costs around that amount.
“Lastly, we should promote the tourism sector or more specifically into the tourism related properties. Malaysia is rich with resources to promote and attract international players. The government must emphasize on promoting this sector by developing resorts, tourism and hospitality related properties. This will lead ultimately to less dependence on the exports and manufacturing industries, which are more competitive in the world market.”
“We hope the government would indeed stress a key emphasis and inject a much needed stimulus to these proposed areas.”
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