Penang condos priced RM500,000-RM600,000 may rise on lower foreign buying threshold

PETALING JAYA (October 11): The price of properties in Penang will rise if the foreign buying threshold in the state is lowered, said Henry Butcher Malaysia (Penang) Asset Valuation executive vice-president for asset valuation Shawn Ong believes that 

The Malaysian government announced a proposal in Budget 2020 to lower the foreign buying threshold for condominiums and apartments in urban areas from RM1 million to RM600,000 in 2020.

“The move could possibly bring an upward revision of market prices for those condominiums and apartments that are currently fetching between RM500,000 to RM600,000 in some places in Penang,” Ong said.

“This would create positive sentiments among property owners as they might be able to sell their properties at higher prices,” he added.

“With the new threshold of minimum purchase price of RM600,000, we foresee more property buying interests in Penang from foreigners, especially those from neighbouring countries such as Singapore, Indonesia and Hong Kong,” he elaborated.

On the Rent-To-Own (RTO) financing scheme also announced in Budget 2020, Ong expects this to help to stimulate the real estate transaction market further. “People fail to qualify for housing loans due to a variety of reasons, including stringent guidelines imposed by Bank Negara.”

“With RTO scheme, it will help to resolve the financial needs of many home buyers especially first time house buyer who desperately need a shelter for own occupation,” he said.

To the disappointment of many, the government is not abolishing the real property gains tax (RPGT) imposed on property disposals after a five-year period, but has merely revised the base year to calculate gains from property disposal from Jan 1, 2000 to Jan 1, 2013, for properties acquired prior to 1 January 2013.

In view of this, Ong believes that transaction activities in the secondary market would be less active now till year end, as property sellers who are either individual citizens or permanent residents with properties acquired prior to Jan 1, 2013 will delay their disposal plan to avoid additional RPGT charges.