According to Kenanga Investment Bank Bhd, the Budget 2017 will remain ‘rakyat-centric’ and focus more on development projects that will highly benefit the public.
Many advantageous developments are foreseen to be announced in the upcoming budget, which includes additional subsidies for the government’s affordable housing. The tradition of offering BR1M to the public might also continue, even though it offers no significant impact on the improvement of the citizens.
As for monetary measures, the recently reduced Overnight Policy Rate (OPR) is expected to remain. But an unexpected further reduction on the rate is unlikely to spur lending to the property sector.
A representative of Kenanga Investment also further noted that an adjustment on the 70% loan-to-value (LTV) ratio cap on the third property purchase is doubtful, as third property buyers are mostly investors and not genuine home buyers. Hence, maintaining the LTV is necessary to hinder speculators.
At the same time, the chances to reduce or remove the real property gain tax (RPGT) is also minimal, as it will cause a panic-sell situation which will worsen the oversupply condition. Meantime, an increase in the withdrawal limit for the Employees Provident Fund (EPF) account 2 might boost home ownership. Yet, such a move will require long-term studies by EPF on its consequences on future retirees.
In addition to this, Datuk Abdul Rahman Dahlan, a minister in the Prime Minister’s Department added that the government is aiming to focus on rural community projects which are lower in cost and impactful to the public at the same time.
“In Budget 2017, the government will balance urban and rural developments, as well as maintain a balance between the East and West Malaysia.”
Mangalesri Chandrasekaran, Editor at PropertyGuru, edited this story. To contact her about this or other stories email mangales@propertyguru.com.my
