Property bubble in 2012 unlikely, says Chor

KUALA LUMPUR: Malaysia is unlikely to experience a property bubble next year, as several measures have been introduced to curb soaring real estate prices, Housing and Local Government Minister Datuk Wira Chor Chee Heung said.

He said in the 2012 Budget, the government reviewed the real property gains tax (RPGT) by increasing the rate for properties disposed of within two years of purchase to 10% from 5%.    

"I would think the 10% is a realistic percentage because we do not want to slow down the property and construction industry," he told reporters on the sidelines of the FIABCI Asia Pacific Real Estate Congress 2011 here on Thursday, Oct 13.

"At the same time, there would not be much room for speculators to try to speculate and make money from buying properties and then flip it in a very short time.

"There is stabilisation of prices, there is not going to be a property bubble," Chor said.

Other proposed measures include a 100% stamp duty exemption on loan instruments for purchase of houses under the 1Malaysia Public Housing Scheme (PR1MA) and 100% loan financing for first-time buyers.

The government will also raise the limit on house prices under the My First Home Scheme from RM220,000 to RM400,000 beginning January 2012 and extend the tax incentive period to five years for Real Estate Investment Trusts (REITs).

Despite the downtrend in the property sector this year, Chor said developers are continuing to build.

"This year we have come out with the most number of licences to developers to sell and to advertise," he said.

The property sector contributed 7.8% or RM30.5 billion to the national gross domestic product (GDP) last year. — Bernama