Higher RPGT may push property prices higher instead of reining in speculation.
It had short live impact in the past and could push house prices higher as sellers may pass on the incremental to the buyers.
Higher RPGT could also spur sellers to postpone disposals and developers to hold back launches in view of weaker sentiment, leading to even tighter supply in the market.
While raising stamp duty may have a bigger impact, sellers would also try to pass on the incremental costs to the buyers.
Any hike will not only affect new projects but also those under construction – especially strata titled and projects under master title whose titles have yet to be transferred.
It could spur sellers to postpone property disposals and developers to hold back launches in view of weaker sentiment, leading to even higher supply in the market.
Tighter regulations are likely to have the unintended effect of discouraging home ownership instead of curbing speculation.
Tightening measures in 2013 could reduce supply in both the secondary and the primary markets as developers may also delay launches due to poorer take up.
House prices in Malaysia have proven to be resilient in the past, driven by inadequate supply to meet demand for landed property and prime areas.
High property prices are attributed to shortage of supply, marked up prices for new launches, demographic changes, rising construction and compliance costs.
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