Analysts on Budget 2017: Cooling measures unlikely to be lifted

The Singaporean government is still keeping its cooling measures despite some fall in property prices. This was also reiterated in July 25 2016 by Monetary Authority of Singapore (MAS). The developers there (Singapore) have also been putting forth their arguments for some relaxations. As of now, nothing has happened. What about Malaysia? Our property market is also pretty cold today when compared to the warmer and hotter days just a few years ago. Will Budget 2017 be the start of relaxation of some of these cooling measures? Below would be some brief comments from some analysts on Budget 2017 and cooling measures. Reported in theedgemarkets.
AllianceDBS Research analyst Quah He Wei gave two strong statements on why it is unlikely for the government to relax the cooling measures. “In the unlikely event of the broad-based relaxation, household debt is expected to spike up. Ultimately, it depends on the banks to access the eligibility of applicants, and banks may be less willing to extend credit for high-risk borrowers. We believe the upcoming Budget 2017 will continue its focus on increasing the supply of affordable public housing priced below RM400,000 to boost home ownership.”
Credit Suisse Securities (M) Sdn Bhd analyst Joanna Cheah also have the similar opinion; there will not be a broad-based relaxation of cooling measures for the property market. Not especially for these three:  reintroduction of the developer interest bearing scheme (DIBS), lowering or removal of real property gains tax (RPGT) or allowing for a higher debt service ratio for homebuyers. She said, “All the aforementioned could fuel speculative purchases once again, which we believe is against Bank Negara Malaysia’s (BNM) priority to keep household debt, which is currently at 89% of gross domestic product (GDP), controlled.”
MIDF Research analyst Alan Lim also does not think there’s going to be any relaxations such as raising the financing for first-time homebuyers to 95% and extension of loan tenures. He shared what BNM said earlier. “BNM has dismissed the suggestion that access to financing is the main problem confronting potential homebuyers, and said that it will be standing firm on its lending policy. Therefore, I think the element of financing flexibility is unlikely.”
propertypriceI have three wishes. First one is for all affordable homes to be speeded up further. Everyone should own a roof over their head, period. Second is for a stricter monitoring and punishing all those who lied to get access to affordable housing which would have otherwise been given to the more needy. Third is for buyers to really read more, view more and then decide more rationally. Think duration, not distance. Think WHY, not where. Buy affordable, not glamour. It does not have to the BEST ever for the first home. We can always upgrade later on. Cheers to Budget 2017. Hope it helps to lift some of the negative sentiments currently.
written on 12 Oct 2016
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