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Budget 2019: Property related items to encourage purchase among first-timers.

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Let’s look at a few key items and the potential effects to the property market from my personal observation of the working people / first – time home buyers. This is the segment which the government intends to help.

Measures to encourage purchase:

#1 – 6-month stamp duty exemption for first time home buyers of houses priced between RM300,000 to RM1 million.  Comment:  This should push up the buying as long as the first-time home buyers are willing to buy within the mortgage which the bank will approve.  It will also lower the entry cost to purchase a property too.

#2 – Government to spend RM1.5bil on affordable housing. Comment:  More details please. How much is the subsidy per home? Or is this to help build additional infrastructure? Does this include BUYING a NEW SYSTEM to manage affordable housing? Will be awaiting for more details from our Local Government and Housing Minister.

#3 – Those earning less than RM2,300 will have access to a fund set up by Bank Negara Malaysia for homes of up to RM150,000 at an interest rate of 3.5% through selected banks.  Comment: Hopefully, we have more of these RM150,000 units which are decently built. From my conversations with some developers, even a RM200,000 unit meant that they lose money for every unit built.

#4 – Allowing property crowdfunding as an alternative to buy the first-home. Comment: I hope the crowdfunding is to build more homes and not for people to buy a 10 percent / a quarter of a property and then think they are already a first-time home buyer. Frankly, first home must be for STAY if we are talking about ‘rakyat’ issues.  As for investment purpose, that’s a much longer term thing.

#5 – Government will waive stamp duty of SPA and loan agreement till end-2020 for first – time home buyers who wants to purchase RM500,000 property. Comment: Definitely a positive one to encourage those who could afford but still staying on the sidelines to make a decision, faster.

There should also be more information made available to these first-time homebuyers who will always be worried with their first purchase. Just look at the occasional gloomy outlook predictions. These predictions may not mean much to the seasoned investors who knows that there will always be ups and downs in the market. For first-time home buyers however, these negative news will rattle them tremendously making that decision to buy their first-home being delayed even further. This is the reason why I would say the sentiment wise, there are two; seasoned investors thrive and keep looking for bargains in a slow market while first-time home buyers are still thinking if they should or should not buy now.

written on 3 Nov 2018

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