World Bank cuts Malaysia’s GDP forecast to -0.1%
The World Bank Group has significantly lowered its 2020 GDP growth projection for Malaysia to -0.1% from 4.5%, against the backdrop of growing uncertainty over the duration and overall impact of the Covid-19 outbreak. “This marked reduction incorporates the slower growth momentum from the second half of 2019, but more significantly, it reflects the impact of the outbreak under a scenario where the current large-scale disruption of economic activities would extend for most of the year, before a partial recovery toward the year end,“ it said. Net exports and investments are expected to experience a larger contraction in 2020, while private consumption is expected to grow at a much slower pace, from 7.6% in 2019 to 1.6% in 2020. Government expenditure is expected to increase on various measures, including the economic stimulus package and other key expenditures and initiatives to mitigate the economic and health impact of the outbreak, but the bulk of stimulus activities are expected to be off-budget in nature. (The Sun Daily)
MIEA: RPGT should be zeroized till the end of the year
The Real Property Gains Tax (RPGT) should be zeroized (as it was in 2007) till the end of the year to help boost the already soft real estate market in the country, said the Malaysian Institute of Estate Agents (MIEA). This will help reduce losses of property sellers who are facing a demand from buyers to reduce prices in light of the economic downturn and the impact of the current COVID-19 pandemic. To help Malaysian property sellers, it also suggested that the collection of Sales and Services Tax (SST) for real estate transactions be placed in ‘abeyance’ until the end of the year to help sellers from having to incur additional costs. For property buyers, it proposed that a transfer of 10% of funds from Account 1 of the Employees Provident Fund (EPF) into Account 2 to provide liquidity for the purchase of homes or assistance in repayment of loans after the moratorium of six months declared by Bank Negara. It added that MIEA had in previously proposed for Interest Only Loans for the purchase of properties to be introduced. (The Edge)
NCCIM calls for extension of time for ongoing housing projects
Voicing concerns on the impact of the Movement Control Order (MCO) on the property sector, the National Chamber of Commerce and Industry of Malaysia (NCCIM) has urged the government to consider allowing an extension of time especially for ongoing housing development schemes. Alternatively, it suggested, it could allow for a waiver of Liquidated Ascertained Damages (LADs) arising from the delay of works at site caused by the MCO and other COVID-19 supply chain issues. It also proposed that foreigners be allowed to purchase any Malaysian property (excluding affordable housing schemes) while the Home Ownership Campaign (HOC) should be extended for another year until Dec 31, 2021 with stamp duty exemptions, to further encourage home ownership and help reduce the number of unsold houses. (The Edge)
Expect more auction properties as economy weakens
As the present COVID-19 pandemic and the Movement Control Order (MCO) pile more pressure on Malaysia’s economy, the housing property market will not be spared either and more properties are expected to be put up for auction in the near future, said real estate consultancy Knight Frank Malaysia. “There will be potential for more job layoffs due to the challenging business environment. Thus, we foresee an increase in non-performing loans that will conclusively lead to more auctions in the market,” said Knight Frank Malaysia managing director Sarkunan Subramaniam. Besides, he added, both buyers and sellers have become more vigilant amid the outbreak by adopting a wait and see approach. There are also disruptions to the property transaction process, such as difficulties in conducting property viewings and conducting title searches. (The Edge)
Dewan Rakyat meeting to proceed on May 18
Malaysia’s next Parliament sitting will begin on May 18 as earlier scheduled, Datuk Takiyuddin Hassan said. The Minister in the Prime Minister’s Department, in charge of Parliament, said the House was taking steps to prepare for the May 18 meeting. “We are also taking measures based on developments related to Phase 1 and 2 of the Movement Control Order (MCO) which has been enhanced in a number of locations,” he said. He added that the government’s focus was to ensure the safety of all, including members of parliament. The House is to sit for 15 days between May 18 and June 23. (NST Online)
