‘Minimum RM1m property purchase not a blanket policy’

KUALA LUMPUR: Raising the minimum purchase price for foreign property buyers to RM1 million is not a blanket policy, said Minister of Urban Wellbeing, Housing and Local Government Datuk Abdul Rahman Dahlan.

Speaking at a press conference yesterday, Rahman stressed that the ministry would not implement it as a blanket policy throughout the country, “because it’s not going to be fair to developers.”

He said the government would advise developers or state governments to increase the minimum purchase price for foreign buyers to RM1 million if there is a chronic problem with affordability issues in the particular areas.  

“There are areas where the RM500,000 minimum purchase price for foreigners does not have a direct impact on the issue of affordability in the local market,” he said after giving a keynote address at the 16th Malaysia Housing and Property Summit 2013 organised by the Asian Strategy & Leadership Institute (ASLI).

Overall, only 5.5% of property throughout the country are owned by foreigners, he said.

“I don’t think we should deprive developers of the potential business they can get from foreign buyers,” he added.

Meanwhile, he said the ministry may consider raising real property gains tax (RPGT) to stabilise the price of houses in the country.

Nevertheless, its effectiveness as a measure to curb housing speculation has been questionable, he said.

He noted that the current low RPGT has not been effective in stabilising house prices, although it has been raised from 5% to 10% in 2011 for properties sold within two years. In 2012, this rate was further increased to 15%.

The house price index by the National Property Information Centre (Napic) recorded the highest increase for the last five years, showing the ineffectiveness of the current RGPT mechanism.

On the progress of the one million affordable housing units by the government, Rahman said the ministry has established a coordination committee to monitor its implementation by 1Malaysia People’s Housing Program (PR1MA), Syarikat Perumahan Negara Bhd (SPNB) and other agencies.

What’s in store... Asli chairman and Sunway Group chairman Tan Sri Dr Jeffrey Cheah (right), Minister of Urban Wellbeing, Housing and Local Government Datuk Abdul Rahman Dahlan (centre) and Asli CEO Tan Sri Dr Michael Yeoh at the 16th National Housing & Property Summit 2013 in Kuala Lumpur yesterday

“Under the first-time home buyer scheme, there is a huge demand but the supply is not there. PR1MA is our answer to that problem,” he added.

PR1MA is a programme dedicated to providing affordable quality housing for the middle-income group living in the country’s urban areas.

In his keynote address, Rahman said that the one million affordable housing units include 500,000 units under PR1MA Corp Malaysia, which will be 20% cheaper than similar units in the market.

“The proposed one million affordable housing units announced by the government would have an impact on market supply and would affect prices of affordable houses in the market,” he added.

He pointed out that the committee aimed to coordinate the efforts by all the government agencies and state governments to ensure that the target of one million housing can be achieved.

“It’s not so easy to pinpoint problems with regard to the runaway prices, it’s not fair just to simply point at property developers. There are many other reasons including some policies of the government that need to be looked at,” said Rahman.

“It cannot be resolved by one party alone, it has to be a collaboration involving everyone.”

This article first appeared in The Edge Financial Daily, on August 28, 2013.


Looking for properties to buy or rent? With >150,000 exclusive listings, including undervalued properties, from vetted Pro Agents, you can now easily find the right property on Malaysia's leading property portal EdgeProp! You can also get free past transacted data and use our proprietary Edge Reference Price tool, to make an informed purchase.