The real estate market should rebound in 2H 2022

KUALA LUMPUR: The real estate sector is expected to rebound in the second half (2H) of 2022, supported by the domestic economic recovery, the reopening of international borders and the policies put in place by the government to energize the real estate market.

Founder and real estate entrepreneur of Pro Men Sdn Bhd, Michelle Chao Xiang Mei, said the country’s manageable COVID-19 infection rate was also helping to bolster positive sentiment in the sector.

“We can see that the government has put in place a number of policies to stimulate our real estate market, such as the exemption from real estate gains tax and the exemption from transfer protocol (MoT) stamp duty. for first-time home buyers,” she says.

She added that buyers will be able to avail of 100% MoT stamp duty exemption when buying properties priced below RM500,000, while buyers of properties priced between RM500,001 RM and RM1 million will qualify for 50% stamp duty rebate.

“We believe this will help urban areas like Kuala Lumpur to rebound, but it could be a slower recovery for suburban areas as it also depends on household incomes,” she said on The Brief on Bernama TV which aired on Wednesday.

Chao said those considering buying property should do proper and careful research before making a commitment, as a major purchase is highly dependent on job stability and personal income.

She noted that now is the time for buyers to take advantage of opportunities in the real estate market, particularly if properties are well-located and offered at a below-market price.

Meanwhile, on Bank Negara Malaysia’s decision to raise the overnight policy rate by 25 basis points to 2.25%, Chao said that while it would result in higher borrowing costs and monthly instalments for borrowers, this would probably not affect buyers of properties priced below RM500,000 a lot.

Borrowers would probably pay an additional RM150-200 per month, which he believes is still manageable.

She noted that despite the higher cost of raw materials and construction materials, developers are offering better packaged products to property buyers possibly absorbing some costs, with more value-added features and affordable pricing for new launches, including government housing projects.

“However, for properties priced above the RM1m threshold, borrowers would be negatively affected, so demand in this particular segment could slow down in 2H2022.

“On that note, we hope the government can re-implement the Malaysia My Second Home (MM2H) program to let more foreigners into the country and digest these higher property prices,” Chao added. — Bernama

Penny D. Jackson