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Stable Mortgage And Tax Relief To Stimulate Property Sector In 2025

Business Today ·  Jan 15 17:49

Stable mortgage and tax reliefs is set to stimulate Malaysia's property sector in 2025 says Hong Leong Investment Bank in its 2005 outlook for the sector.

According to the National Property Information Centre (NAPIC), property transaction values reached a five-year high of RM105.65 billion in the first half of 2024, recording a remarkable 23.8% year-on-year increase. This growth, coupled with a 12.3% reduction in residential overhang, signals a recovering market driven by improving demand and affordability.

Additionally, government initiatives, such as tax reliefs for first-time homebuyers announced in Budget 2025, and stable mortgage rates supported by a 3% OPR are fueling optimism. However, rising living costs, inflationary pressures, and high unsold inventories continue to pose challenges for market recovery.

In the opening address at the 18th Bursa-HLIB Stratum Series titled "Property Sector: Entering A New Cycle?", Lee Jim Leng, Group Managing Director and CEO of Hong Leong Investment Bank emphasised that the positive indicators highlight the sector's resilience and adaptability amidst adversity.  

"Affordability remains a key element in determining the sector's future outlook. In 2025, we expect higher wages for civil servants and the introduction of a higher minimum wage in February will increase disposable income, catalysing demand for properties across the country. This, coupled with the current 3% OPR and stable mortgage rates, creates a favourable environment for both homebuyers and investors, making homeownership more accessible," said Lee.

"At HLIB, we believe a stable employment growth rate and a projected GDP growth of 4.9% this year, the economy remains on firm ground. These positive indicators provide the right conditions for sustained growth and a virtuous cycle of demand and investment that contributes to Malaysia's broader economic development. While these are promising signs, it is necessary for continued innovative strategies and collaboration within the industry to tackle the challenges," she added.

HLIB said the sector's optimistic outlook is further supported by the government's initiatives outlined in Budget 2025. Notably, the tax reliefs of up to RM7,000 for first-time homebuyers purchasing properties priced up to RM500,000, and up to RM5,000 for homes priced between RM500,000 and RM750,000. These initiatives are expected to spur demand while aiding the market's recovery by making homeownership accessible and contribute to long-term growth.

The above content is for informational or educational purposes only and does not constitute any investment advice related to Futu. Although we strive to ensure the truthfulness, accuracy, and originality of all such content, we cannot guarantee it.
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