Budget 2023 and property market Malaysia

I think every media is reporting on Budget 2023 and continue to gain lots of attention on it too. As usual, there are the supporters who said everything great about Budget 2023 and there are also the other side which nothing would make sense unless they are the ones doing it. It matters very little yeah because both sides do not determine if we live well, earn well or even invest well. When we are successful in our investments, it depends on what WE do and not what both sides say or do yeah.

Here is that official site about Budget 2023. MOF’s website. This is another version of the Budget 2023 which I think is quite comprehensive even if it gives a summary of the Budget 2023. Edgemarkets.com Alternatively, another one from FMT too. Click here to view. This is also source for Budget 2023 readings.

Meanwhile, the below would be some of the things which will be directly related or indirectly influencing the property market too.

The whole budget is RM40 million higher than the one for 2022. It has to be larger every year yeah since the economy is also supposed to be growing yearly. Plus the fact that budget will need to be expansionary in nature to help the economy during this recovery period too. We can see interest rates are also increased a little to ensure growth is not derailed if high interest rates were introduced like the US for example. (Yes, the US is already in technical recession in case you did not yet read)

Construction Industry

RM1.1 billion for repair and maintainance of all schools including vernacular and religious schools.
RM430 million to construct 5 new schools in Sabah, Sarawak, Terengganu, Cyberjaya and Selangor. (Yes, I wonder the same; just 5 new schools?)
RM188 million to set up 10 Kemas daycare centres.
RM562 million to implement the Sabo dam project.
RM510 million to improve road infrastructure to Pengerang.
Pan Borneo Highway to be completed by 2024.
RM11.4 billion for maintenance and repair of existing government buildings.
RM5.2 billion for maintenance of state roads.
RM150 million for the development of border towns near Thailand and Kalimantan.
RM3.7 billion for small and medium projects across the nation.
RM500 million on G1-G4 infrastructure projects.
RM42 million to upgrade police quarters.
RM118 million for the maintenance of armed forces homes.
RM28 million to upgrade prison staff quarters.
RM420 million to repair dilapidated hospitals and clinics.
RM1.8 billion to build new health facilities and procure medical equipment.
RM15 billion for flood mitigation initiatives.
RM2 billion to build retention ponds.
RM500 million to widen rivers in Kelantan.
RM3 billion for Green Technology Financing Scheme (GTFS).
RM150 million from Khazanah Nasional Berhad to support development of green projects.
RM216 million to clean rivers nationwide.

Domestic consumption (more money to spend means business can earn more money and hire more people)

In total, Putrajaya will spend RM10 billion in welfare and Bantuan Keluarga Malaysia (BKM) aid.
RM2.5 billion in welfare aid benefiting 450,000 households.
RM2,500 in BKM aid for households earning less than RM2,500 monthly.
Up to RM1,250 BKM aid for singles and RM3,000 for single parents.
One-off RM500 incentive for female BKM recipients who give birth in 2023.
RM7.8 billion for BKM which will benefit 8.7 million people.
RM1 billion in welfare aid for the elderly.
RM1.2 billion to support disabled people to be financially independent.
RM10 million in e-hailing vouchers for the disabled.
RM8 million for social support centres.
RM734 million for MySalam programme. This will benefit 1.5 million people from the B40 group.
Voluntary Employees Provident Fund (EPF) contributions raised from RM60,000 to RM100,000 a year.
RM21 million in grants for operators of welfare homes.
Limits for Amanah Saham Bumiputera (ASB) and ASB2 savings to increase to RM300,000.
Government to provide incentives to establish more daycare centres for the disabled.
RM120 million for Kasih Suri Keluarga Malaysia programme, benefiting 200,000 housewives.
RM1.5 billion for RM100 increment for all civil servants between Grade 11 to Grade 56.
RM1.3 billion for one-off RM700 special aid for 1.3 million civil servants under Grade 56.
RM350 one-off aid for one million retired civil servants.
Aidilfitri aid for civil servants increased to RM600.

For Future, actually. When businesses do better, they hire more people too.

RM235 million to support the development of female entrepreneurs.
One-off RM1 billion grant to all registered MSMEs and taxi drivers. To benefit one million recipients.
RM45 billion Semarak Niaga funds for entrepreneurs.
RM10 billion in funds from Bank Negara Malaysia (BNM) to automate and digitise SMEs.
RM200 million to boost income and productivity of smallholders.
GLCs and GLICs to invest up to RM50 billion in 2023.
Government-linked companies (GLCs) and government-linked investment companies (GLICs) to invest RM50 billion in 2023, including RM45 billion in direct domestic investments.
RM100 million to support development of local technology companies.
RM10 million in matching grants allocated to help SMEs.
RM800 million to provide RM100 e-wallet credit for 8 million people in the M40.
Petronas will contribute RM2 billion to the National Trust Fund (KWAN).
RM15.1 billion allocated for the higher education ministry.
RM3.8 billion for scholarships and education loans.
RM6.6 billion for Bumiputera education loans.
RM6.7 billion for TVET training and education.
RM180 million to fund TVET training, benefitting 13,000 trainees.

More jobs means more potential property investors (even if only a small percentage may buy)

The MyStep programme will provide 50,000 jobs including 15,000 in the public sector and 35,000 in government-linked companies (GLCs).
RM750 million to upskill 800,000 workers.
RM100 million for Mitra to develop entrepreneurs.
Socso to provide incentives for employers to hire the disabled, Orang Asli, ex-convicts and women returning to work. The incentive worth up to RM750 a month will be given for three months per employee.
Socso will provide incentives for employers to hire jobless youths.

Our tax remains high and GST would have helped ACTUALLY (yes, this is for those who thinks SST is better…)

Personal income tax reduced by 2% for those earning between RM50,001 to RM100,000.
Income tax exemptions of up to RM3,000 for Tadika and daycare fees.

When more tourists are coming, get ready for a rise in need for accommodation; property market boost

RM200 million to promote tourism recovery.
RM90 million in grants to promote tourism activities.
New chartered flights to and from East Asia and the Middle East.
RM10 million to promote eco-tourism.
RM25 million in incentives to promote domestic tourism.
RM500 million in tourism financing from BNM.
RM10 million for the ThinkCity initiative in Kuala Lumpur.

Public transport will always be key to property demand. Driving cannot be the only option.

RM180 million to improve bus services in Melaka, Kedah, Kota Kinabalu and Kuching.
Continuation of My50 RapidKL monthly pass to benefit 180,000 users.
RM16.5 billion for major transport infrastructure projects.
RM50.2 billion for the MRT3 project.
RM1 billion for the maritime and logistics industry.

Yes, finally the most DIRECT one to the property market

Stamp duty discounts of up to 75% for houses worth between RM500,000 to RM1 million.
RM10 stamp duty for properties transferred between family members.
RM367 million to build people’s housing projects (PPRs), to benefit 12,400 new residents.
RM3 billion for housing credit guarantees.
RM40 electric bill subsidy to be extended.

Conclusion

I share this conversation with everyone again about the property market’s future.

Friend: I think I want to invest into Singapore and not Greater KL properties.

Charles: Good idea. What’s the reason?

Friend: I think Singapore’s property market would continue to increase in prices.

Charles: I also agree with this assessment too. How many years do you think Greater KL property market will need to reach the current Singapore property price level?

Friend: Easily 10-15 years I think.

Charles: You have also just answered why Greater KL property market is a good place to invest too.

If you do not get the idea, it’s okay. There are so many other investments which everyone can do and it does not need to be into the property market.

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