There has been a lot of talk in the industry whether people should buy or rent a property now.
The Malay Mail Online reported Finance Minister II Datuk Seri Johari Abdul Ghani recently said during a dialogue session for the Transformasi Nasional (TN50) vision, that Malaysians should change their mindset when it comes to buying properties at a young age (especially those who just started working with their first job). Most of the time, it results to a huge long-term debt.
“It is our culture — we don’t believe in renting. We have to change our mindset. When you go to the UK — they just rent until they have the money to make a long term commitment,” Johari said.
Even chartered surveyor Ernest Cheong said during an interview with Free Malaysia Today that renting might now be a better and more viable option. Why? The given high prices of properties on top of the rising cost of living, is not a good equation.
However, in another interview with Henry Butcher Malaysia director Lim Eng Chong, there was a different opinion to this topic. He says that the property market has softened enough with fewer property development launches in 2017 compared to 2016. On top of that, prices are dropping, so he advise people to start considering to make a purchase.
“When you buy a property and pay the instalments over 30 years, at the end of it you will have an asset but if you rent you have nothing, and the ringgit you may have saved in the bank from renting instead of buying would have lost much of its value over the years.” said Lim.
He acknowledges that there is an oversupply of properties in the market now but predicts it would stabilise in one or two years.
Furthermore, in addition to the new stamp duty fees that will be implemented on 1 January 2018, the Stamp (Amendment) Bill 2016 was introduced and tabled for its first reading in the Lower House of the Malaysian Parliament (Dewan Rakyat) end of last year.
The proposed amendments under the Stamp Bill to the current Stamp Act 1949 will see more strict requirements imposed onto home buyers as reported by Personal Wealth, The Edge Malaysia. One of it being, having to pay ad valorem duty before the sales and purchase agreement is signed.
That itself will increase the barrier of entry for home buyers. Under the current Act, the duty is paid in the later stages of the property-buying process.
We think it depends on each individual’s prerogative and their own financial capabilities. Whether they should buy or rent a property at this point of time or not. While it may seem to be a good time to do so, a person shouldn’t force themselves into buying a property if they really can’t afford to. What do you think?
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