Yesterday, I was speaking to a quite responsive crowd in Shah Alam. It was the starproperty fair in Central I-City, Shah Alam. The attendees nodded their heads and even gave answers every time I ask questions. When I asked if they think the new threshold RM600,000 is good for the market since foreigners can now buy Malaysian properties, some disagreed. Then, I asked if they know that this threshold is ONLY for high-rise properties in Kuala Lumpur, many showed they did not know. Actually, it’s not even for completed or properties under construction. It is only for overhang properties according to Finance Minister Lim Guan Eng.
When we say overhang properties, then this is only for completed properties which remain unsold for 9 months. Thus, the total number of such properties for sale at a new threshold is only around 4,000 units. (less than) This is a very small number within the overall property transactions in Malaysia on a yearly basis. Please look at image below from iproperty.com.my Hope we could see clearly why this 4,000 is not going to be a huge thing beyond removing some negative aspects of the current property market; overhang units. Since this RM600,000 is only for Kuala Lumpur, REHDA is hopeful that Selangor will also lower its current threshold for foreign purchase of residential properties.
Article in edgeprop.my here. The Selangor branch of Real Estate and Housing Developers’ Association (Rehda) is currently in discussions with the state government to reduce the price threshold for high-ruse units. Its chairman Zulkifly Garib said that even though Finance Minister has set RM600,000 as the new line, land matters come under the purview of the state.
In Selangor, the threshold price for foreigners is RM2 million in Zones 1 and 2— including areas such as Petaling and Kuala Selangor — and RM1 million in Zone 3 which includes Hule Selangor and Sabak Bernam, He shared that the budget announcement is a good move. He said, “That’s why we urge the state government to lower down [the threshold] a bit. This is only a one-time thing for 2020. Let’s give it a shot.”
Rehda Selangor is expecting “quite a bit more sales” over the remaining two months of the year. Zulkifli shared that for Selangor alone, a total of 11,000 units of homes valued at RM7 billion had been sold under the Home Ownership Campaign 2019 which has been extended till end of December 2019. This number is more than the RM3 billion targeted nationwide during HOC’s initial announcement. Article in edgeprop.my here.
Everyone should now be clearer on three things yeah. Total number of overhang units which are currently available is just around 4,000 units. Secondly, overhang are units which had been completed and remained unsold for 9 months. Third is that Selangor has no properties for sale under this RM600,000 threshold. Not even a single unit currently. Last but not least is that in comparison to the total transactions numbers, this offer of overhang units remain very small. Thus, I am supportive of this move too. Happy buying, quickly since the number of units are quite small.
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