The RPGT abolishment for property disposals in the 6th and subsequent years of ownership is long-awaited, says Knight Frank Malaysia
by S BIRRUNTHA / pic by HUSSIEN SHAHARUDDIN
THE overall outlook for the residential property remains positive for the first quarter of 2022 (1Q22), according to Knight Frank Malaysia.
The property consultancy noted that this will be backed by proper product positioning, various property-related incentives and initiatives under the multiple stimulus packages, the recently concluded homeownership campaign (HOC), as well as developer-led marketing campaigns, low-interest-rate environment and others.
Knight Frank Malaysia deputy MD Keith Ooi said the abolishment of the real property gains tax (RPGT) for property disposals in the sixth and subsequent years of ownership is long-awaited.
He added that this augurs well especially for long-term property owners who wish to dispose of their existing properties for purposes of an upgrade as well as for empty nesters looking to downsize.
“The exemption of the tax penalty is expected to boost activity, especially in the secondary market.
“We believe the residential market will continue to self-correct amid challenges brought on by the Covid-19 pandemic.
“In the short-to mid-term, more direct measures, however, may be required to revitalise and sustain the slow growth momentum of the property sector as the emergence of new Covid-19 variants continues to pose downside risks,” he said in a statement yesterday.
Commenting further, Ooi said the prohibition of physical property viewings and other sales activities (including closure of sales galleries) during the pro-longed phases of lockdown had impacted housing sales.
He shared that in the primary market, there has been a shift towards virtual viewings and tours with online sales on the rise as more developers embrace digital marketing.
Nevertheless, he said physical property viewing is still preferred for most sub-sale homes.
He also noted that the pandemic has also spurred demand for properties away from the hustle and bustle of the city as is evidenced by zero new launches within Kuala Lumpur (KL) City during this review period.
“The Covid-19 pandemic has fuelled demand for residential properties especially landed housing in established and upcoming suburbs with good connectivity where prices are more affordable and competitive.
“With the potential shift to hybrid work arrangements post-pandemic, home-buyers are seeking ideal living spaces which are larger with higher emphasis on functionality and comfort,” he added.
Ooi also highlighted that with the government’s focus more skewed towards the primary market in terms of incentives and policies, the momentum in KL’s secondary market remained flattish.
He said during the review period, the overall average transacted price in KL’s high-end residential sector remained relatively stable with a slight decrease of circa 0.6%.
“The pricing for prime housing, particularly landed residential properties, are expected to gradually rise throughout 2022 as the property market is widely expected to start recovering on the back of a more positive outlook,” he noted.
Meanwhile, Knight Frank Malaysia’s Real Estate Highlights second half of 2021 (2H21) which features the findings of property market performance across the Klang Valley, Penang, Johor Baru and Kota Kinabalu revealed that there were generally fewer completions and launches in 2H21.
This was due to the strict containment measures to curb the spread of Covid-19 infections delayed construction works, project delivery and completion of real estate transactions.
Knight Frank Malaysia MD Sarkunan Subramaniam highlighted that during the review period, there was only one notable completion in Kuala Lumpur’s high-end condominium market (Ascott Residence), bringing the cumulative supply to 66,128 units.
“The HOC which has just ended, has been beneficial for first-time homebuyers, as well as developers — improving sales and reducing property overhang.
“In 3Q21, the volume of transactions of high-rise residential properties (including serviced apartments) in KL showed an upward trend, soaring 25.5% on the quarter albeit registering lower transacted value, likely supported by gradual easing of restrictions and reopening of sales galleries,” he noted.