Developers: We don’t want property flippers - YA RIGHT!

I almost fell out of my chair reading this. If developers are really serious about curbing speculation then there should be no "Speculator Package" like thousands of small affordable studio units that comes with low or no downpayment and DIBS

http://www.themalaysianinsider.com/malaysia/article/developers-we-dont-want-property-flippers/

By Lee Wei Lian

October 09, 2012

KUALA LUMPUR, Oct 9 — Too much speculation is bad for the property market, and buyers should take a longer-term view, said the Real Estate and Housing Developers Association of Malaysia (REHDA) today.

This comes after widespread complaints that speculators or “flippers” were responsible for pushing up property prices faster than the level of income increase especially in urban areas, crowding out genuine homeowners and investors.

File photo of condominiums in Kuala Lumpur. Housing affordability was the number one issue identified by the recent Budget 2013 online feedback gathering platform.

“We, as developers, we also don’t want them (speculators) to come and buy to flip,” said Datuk Ng Seing Liong, REHDA’s past president, at a media briefing on the upcoming Malaysia Property Exposition (MAPEX) 2012 here.

“Too much speculation is no good. We want a long-term and sustainable market.”

Ng also said that after the hike in real property gains tax (RPGT) announced in Budget 2013, the rate was now at a “healthy” level.

He noted however that it would give the public the impression that the government was “flip flopping” on the issue of RPGT as it has been raised twice in the last two budgets after having previously abolished it in 2007.

REHDA treasurer N.K. Tong said he did not expect a severe impact from the RGPT hike as it would not affect long-term investors.

“We want people to take a long-term view of property investment,” he said.

The RPGT was raised from 10 to 15 per cent for properties sold within two years and from five to 10 per cent for properties sold between two and five years from time of purchase.

There will be no RPGT levied on properties sold after five years.

Housing affordability was the number one issue identified by the prime minister’s Budget 2013 online feedback gathering platform, which ran from July 16-29, receiving almost 3,000 separate forms of feedback on the topic.

Apart from the RPGT, the government’s previous measures to cool off the market include capping the loan-to-value ratio for property purchases for third houses and responsible lending guidelines introduced in January which calculated loan eligibility based on net income rather than gross income.

The property market has shown some signs indicative of a cooling this year as the home loan approval rate dipped nearly seven percentage points in the first half of the year to 46.8 per cent from 50.1 per cent during the same period last year.

The House Buyers Association (HBA) said however that the increase in RPGT in Budget 2013 was too “feeble” and would not be able to deter flippers as they typically buy newly launched properties and sell them after construction is completed two years later, by which time they escape from having to pay the highest tax bracket of 15 per cent under the revised RPGT.

MAPEX 2012, which is organised by REHDA, will be held from October 19-21 at MidValley Megamall.

Based on feedback received from exhibitors, the exhibition will have 2,119 units for sale worth some RM2.74 billion.

Ng encouraged people to visit the exhibition even if they were not going to buy as it was a means to educate themselves on property.

He said they could attend free talks by experts as well as compare prices and offerings from some 70 developers.

“Don’t rush into property,” he said. “It is a long-term investment.”