Low capital gains taxes, easy access to bank loans, speculative buyers and foreign investors…
Blog reader Malaysian gives us an insight into the investment or speculation in the property market:
I am telling you from the mouth of an agent:
Question: Why is it that each time a project is finished, so many units are up for sale?
Agent: Many of the buyers are investors who are only interested in making a fast buck.
Isn’t that unfair to genuine buyers who cannot get one because it is artificially ‘sold out’? Isn’t the 5 percent tax on property sold within five years good enough to discourage investors?
Agent: Ha! What is 5 per cent property tax compared to the gains they make once they sell off their investment?
How do they have so much money to buy or easily get a loan?
Agent: You don’t pay much for the 1st instalment, the rest is paid by the bank during the construction and once it is ready, there is a rush to sell them ASAP! That’s why you see so many units to sell once the keys are handed over. Some even have more than one unit!
You mean the bank can give them a few loans?
Agent: My guess is – either they use their relatives’ name to obtain loans or those investors are good customers for the bank since they often repay their loans fast.
Why is the property market value so high?
Agent: Greedy owners who refuse to be realistic. Demand from foreign buyers push up the prices too.
So, Anil, it is no secret that there are many investors in new projects!
It is not just in Penang. I have been involved indirectly in the property market for five years now. The government should increase the property tax more to discourage these investors.