Knight Frank: Property market improving after more policy clarity post-election

The interior of the First Quality Centre in Malaysia at the SkyWorld Property Gallery in Kuala Lumpur January 22, 2018. Property market sentiment is said to have improved in the first half of 2018. ― Picture by Yusof Mat Isa
The interior of the First Quality Centre in at the SkyWorld Property Gallery in 22, 2018. Property market sentiment is said to have improved in the first half of 2018. ― Picture by Yusof Mat Isa

KUALA LUMPUR, July 26 — Market sentiment in the property sector improved in the first half of 2018 buoyed by a smooth transition of power and greater policy clarity from the new government, consultancy firm Knight Frank said in its biannual report released today.

The firm said strong economic growth from the previous year and a more stable post-election environment pointed to signs of improvement in a market dogged by years of sluggish growth.

“Post-election, there appears to be an uptick in enquiries from potential buyers due to renewed confidence in the newly elected government,” the report said in its outlook on high-end strata units around the capital city.

The previous administration was forced to impose a blanket ban on all developments for properties in the RM1 million price bracket after Bank Negara Malaysia warned of the growing overhang of high-end condominiums segment late last year.

The current Pakatan Harapan government, which took over power in May following a shock win that ended Barisan Nasional’s six-decade rule, said it would not lift the ban for now.

The four-party coalition also promised to reform the housing market.

New Housing and Local Government Minister Zuraida Kamarudin outlined key points for a public housing policy that include correction measures for both the primary and secondary residential property market.

Knight Frank in its outlook on the residential segment around the country said there are signs that the policy has spurred confidence among investors.

“In the mass housing market, there is a plausible return of buyers and investors as they actively look for good deals ahead of the anticipated recovery,” it said.

The firm also expected to see growth in the commercial property segment in the second half of 2018 as investors will seek to exploit the three-month “tax holiday” to bag properties at discounted prices.

“The three-month tax holiday period effective 1st June is also positive for the property market,” the outlook said.

“The zero rating of the Good and Services Tax (GST) is expected to boost the commercial sub-sector as buyers purchasing commercial properties during the tax holiday period pay 0 per cent GST.

“Thus, we expect to see more activities in this market segment.”

Residential properties are however exempted from the consumption tax, which means house prices are likely not to float around present level, the firm said.

Source: The Malay Mail Online

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