Overnight Policy Rate (OPR) Will Remain Unchanged

 With Bank Negara Malaysia’s announcement in September to maintain its overnight policy rate (OPR) at 3% and expectations that the OPR will remain unchanged this year, Mah Sing is optimistic about the outlook of the property sector, as a stable OPR will bring confidence to the real estate market and investing in properties is a good hedge against inflation.

Mah Sing’s Founder and Group Managing Director, Tan Sri Dato’ Sri Leong Hoy Kum, hopes that the government will implement further measures with the aim to help first-time home buyers, ease their home-buying process, and accelerate the property industry’s recovery.

“We hope that the government will consider the following as part of its effort to help the rakyat, stimulate the property sector, and support its vision for Malaysia Madani:

1. Revive Home Ownership Campaign (HOC), and Enhanced Financing Scheme to Ease Home Ownership for First Time Home Buyers  

“We hope that the government will implement additional measures aimed at first-time home buyers, specifically in home financing, to increase home ownership. Impactful measures would include:

• Revive the HOC, as the incentives given under the campaign have proven to be vital in helping home buyers secure their home while reducing the housing overhang situation, such as the 100% stamp duty exemption for properties priced from RM300,001 to RM1 million.
• A one-off First-Time Home Buyers’ Grant of RM30,000 for properties priced up to RM500,000 and/or to reactivate the MyHome Scheme program for eligible purchasers.
• Lower, fixed-rate financing for first-time home buyers for properties priced up to RM500,000.
• Step-up financing allows middle-income buyers more time to improve their income during the first few years of home ownership.

For all buyers, we propose restoring the maximum loan tenure to 40 years and referring to gross income rather than net income when reviewing loan applications.

2. Tax exemption for interest incurred during construction

“We hope that the government will consider introducing a tax exemption for end-financing interest incurred during construction. This is an ideal way to promote home ownership, as there will be direct tax savings for homebuyers.

3. Reduce and standardize the minimum threshold for foreign property ownership to RM600,000

The current minimum threshold for foreign property ownership varies according to states. “We hope that the government can review and standardize the minimum threshold to RM600,000 across all states. With the current currency rate, it will attract foreigners to invest in tangible investments.

4. Incorporate appealing policies into the Malaysia My Second Home Programme (MM2H) and promote the Malaysia Premium Visa Programme (PVIP)

“We would like to propose to the government that more appealing policies be incorporated into MM2H and promote PVIP, for Malaysia to remain competitive in encouraging more eligible foreigners to stay and invest in Malaysia.

“We hope that the below proposal for MM2H can be considered:

• Lower the qualifying minimum income, liquid assets, and fixed deposits instead of the high threshold applied during the revision in 2021.
• Impose different classes of applications tailored for various foreign applicants.
• The new rules should not affect any existing MM2H pass holders.
• The duration of the MM2H pass to remain at 10 years.

5. Waiver or reduction of duties on construction materials until prices normalize

“We hope the government could consider lifting the taxes and levies imposed on imported construction materials. According to the Department of Statistics Malaysia in June 2023, the unit price index of construction materials recorded an increase between 2.1% and 8.4% on a year-on-year comparison for almost all construction materials except for steel and metal sections, steel, and plywood. This added to the challenges faced by property developers, on top of inflationary pressures and economic uncertainties.

6. Incentives for developments incorporating green features  

“We hope the government will continue to expand green building development and consider providing small grants to developers to encourage industry participants to incorporate more green features and renewable energy sources such as solar panels into their developments. These measures will contribute to the goal of becoming a carbon-neutral nation by 2050.

7. Incentives for adoption of Industrialized Building System (IBS) and Building Information Modelling (BIM) 

As announced in Budget 2021, the tax incentive given to manufacturers of IBS components was extended for another five years, until December 31, 2025. “We hope that the government will consider extending attractive incentives to property developers who utilize IBS and BIM in their construction projects, particularly affordable residential developments. This will encourage more property developers to adopt IBS and BIM, resulting in higher-quality developments, reduced labor dependence, increased site neatness, and increased productivity,” said Tan Sri Dato’ Sri Leong Hoy Kum.