I READ with great interest the report “HK property shares slump on curbs to cool prices (The Star, Oct 30) where the Hong Kong government imposed a 15% tax on non-resident and corporate property buyers and also stiffened resale stamp duty fees on property transactions.
The drastic and decisive action is viewed as timely and good for the well-being of the Hong Kong economy and property market.
Its central bank has also imposed numerous other measures to curb excessive financing for property purchases.
In Singapore, the government recently imposed a 10% tax on purchase of residential property by non-residents. Also more stringent guidelines were imposed on banks lending for property purchases.
In Malaysia, we have a property bubble that has built up over the past three years but the industry participants i.e. the developers and property agents are saying otherwise. And so is the Government that has been very slow in undertaking measures to cool the property bubble.
In the recent 2013 Budget, the Government only imposed a very mild 5% additional real property gains tax.
Measures by Bank Negara Malaysia (BNM) at the beginning of the year, although welcome, failed to cool the growth of property prices.
In Malaysia, the price of residential and commercial properties in major cities have more than doubled in the past three years.
This tremendous jump in prices has led to higher rental and hardship to most low and middle wage earners.
This unhealthy increase is due to easy financing and speculation by investors.
You can see in many property launches where speculators buy a few units and obtain easy financing from banks.
The Government and BNM have to be more decisive to control further price increases.
At present price levels, most Malaysians are already facing difficulty to buy a studio apartment (less than 500sq ft) that is priced above RM200,000.
If this property bubble is not well contained, the country will face a huge burden when our financial institutions face massive losses due to a property downturn.