With improving domestic and external demand coupled with measures announced in the 2010 Budget, the 2010 market overview for residential and commercial properties is generally expected to be positive. From surveys conducted by REHDA Malaysia among its members, half of the respondents opined that sales will improve in the next six months with the majority anticipating actual recovery to take place beyond Q2 2010. In terms of pricing, most respondents envisaged that property prices movement in the next six months will remain stable and even if there is price increase, most opined that it will be less than 10%.

T h e G o v e r n m e n t ’ s r e c e n t liberalisation, especially on the deregulation of the Foreign Investment Committee (FIC) guidelines in relation to acquisition of equity stakes, mergers and acquisitions as well as listing of companies, will definitely boost the equity market and speed up recovery for the property market. However, the industry is taken aback by the Government’s decision to impose the Real Property Gain Tax (RPGT) at 5% for disposal of real property. REHDA is of the opinion that re-instating RPGT after a brief exemption period of less than three years will adversely impact the already fragile market confi dence level among investors, both local and foreign.

Worse yet, the move is also a reinforcement of Malaysia’s infamous ‘flip-flopping’ property investment policies while at one hand we undertake various efforts to attract more foreign direct investment (FDI) into the property sector. A joint memorandum of appeal to the government on not to reinstate the RPGT has been recently issued by REHDA and related industry players.