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  • Writer's pictureFelicia Soon

Property Price in Malaysia after Election

Author: Tony Yap, Property Investment Coach, Director & Co-Founder at Bricksmen Group

First of all, congratulations to all Malaysian and welcome to a new era - Tony Yap

It is a historical moment for everyone of us to witness the rise of a new government in Malaysia. Personally, I am really excited and looking forward to a better, cleaner and stronger Malaysia.

Now, after the day 9 May 2018, I been frequently asked about what is going to happen next to our Malaysian property market? Well, property market is depending on two factors: Economy growth and market sentiment. If our economy is growing in the healthy pace and market sentiment is good, our property market will be doing well.

So, is our country’s economy doing well? I will say, we are now in TRANSITION PERIOD.

Looking at the current status, our new government is trying to recover our government financial strength and the overall economy system in Malaysia. Besides solving the national debt and the living cost problems, as what I have observed so far, our new government is heading to the direction of attracting “Mutualistic” Investment, instead of “Parasitic” Investment.

Parasitic Investment is a form of investment where one party gets all the benefit, while the other party suffers lost. Some of the previous Mega Projects initiated by our previous government that joint venture with others companies, are not showing a long term benefit to our people. In fact, the JV partners gain all the benefits. As of now, we need more mutualistic and genuine investors to help us in the overall infrastructure development.

And.... What about zero GST implementation? What will be the impact to the Property Market?

Building cost and material cost is now not to be charged of 6% GST, we are expecting the overall building cost to be lowered down. However, there will not be a significant price drop in the short term, as some of the building materials (previously purchased) have already been charged 6% GST.

It is a smart move to stimulate the market. Some developers have already lowered the price around 2% - 3% in response to this 0% rate GST implementation. This implementation is encouraging those wait-and-see purchasers to take action now, especially the commercial title properties buyer.

The decision to terminate GST will not only bring down business cost, but also improve the ease of doing business in Malaysia. Hence, it would encourage more money to flow into the market. This will in turn stimulate the economy and increase spending power in the overall market.

While we are decreasing the properties supply in Klang Valley area, the increase of purchasing power within the market will definitely help in maintaining the property value.

Pic courtesy of Loanstreet

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