KUALA LUMPUR: Real estate agents have greeted the government’s move of reinstating a fixed 5% real property gains tax (RPGT) effective Jan 1, 2010, with scepticism, saying the local property market was still on uneven footing.

Although most of them acknowledged that a recovery was underway, they felt the timing of the reinstatement of the RPGT, which was waived in 2007, left much to be desired and could create a last-minute selling rush towards the year-end.

“Those who already planning to sell will rush to meet the year-end deadline as a 5% tax on property gains can be a lot of money,” said Kim Realty chief executive officer Vincent Ng.

“Personally, I am surprised at the return of the RPGT. I don’t know why it was reinstated; it was certainly not to cool down the industry as it was not heated up,” he said, adding that the public should be allowed to trade actively in the property sector to boost its attractiveness.

Another real estate agent agreed with Ng’s view on the rush to sell, saying those who were previously not in a hurry to sell would now be thinking about pushing the deadline. “They may even sell a bit lower now,” she added.

“Those who have decided not to sell will still take their time, as 5% RPGT is not that bad. If prices are not good and profit is marginal, they may hold on.”

She is adopting a wait-and-see approach, saying the market should be watched closely over the next two months for warning signs.

Meanwhile, property listing website Thinkproperty.com.my said in a press release on Oct 26 that it saw an influx of new property listings over the weekend in addition to a high number of listings that had reduced their initial asking prices.

Principal for Resource Realty and marketing director of Starfish Training Sdn Bhd Warrick Singh said the flip-flopping of government policy was sending the wrong message to property investors.

“In the short run, it is unlikely that we will see a rush to sell as the market isn’t very strong at the moment,” he said. “However, in the long run, I foresee inflation being created because of this.”

Warrick said that in the course of his research, he found that 42% of total lending from financial institutions was from banks for the purchase of properties, and of this, 65% was for the purchase of residential property.

“We could easily be looking at RM1 billion worth of inflation being created next year,” he said, adding that some 28,000 to 32,000 sales and purchase agreements (S&Ps) were signed annually and the 5% RPGT would reduce the number of S&Ps signed.