Fortunately, there is no significant negative impact towards property/construction sector post budget 2015 announcement.
1) No further increase in Real Property Gain Tax (RPGT)
I deem this to be a good news as further assessment will only be done for the year 2016.
2) 50% stamp duty exemption for first time home buyers extended
This was extended till 31st December 2015. The current exemption is due to expire at 31st December 2014. Looks like we have another year to enjoy this privilege.
3) Youth Housing Scheme
- For married youths between the ages of 25-40
- For purchase of first property
- Household income less than RM10,000 per month
- House price less than RM500,000
- 35 year loan
Under the scheme, the eligible couple will receive RM200 per month from the government to cover the monthly installments including the payments for stamp duty and insurance as well. Limited to the first 20,000 eligible houses.
I honestly don't find this scheme useful as at all. It will only benefit the couple for 2 years and is limited to 20,000 houses. How they are going to serve the remaining 33 years loan if they already have issue purchasing the house to begin with. Are we assuming the couple will get a significant pay raise/promotion within that period of 2 years to pay off the loan balances?
All in all, I rather have no significant benefit than having negative impact on the property/construction sectors. Inline with that, affordable housings will continue to be the theme for next year. Looks like there will more spotlight towards Mah Sing, Huayang, Tambun Indah and Matrix.
PROPERTIES index seems to bearish due to negative global outlook and fear of rising RGPT hike in upcoming budget announcement. S&P 500 closed at 1906 and currently testing their SMA200 support level. Further plunging will negatively affect market sentiment. That said however, I believe property counters will continue be bullish if one is to look into longer term period.
- Ben Lim
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