Recent budget as promised before tabling was to keep home prices to an affordable level however as it turned out little had been made to keep the prices from escalating in the short-term.
On the supply side the government has announced a budget of RM1.6 billion for construction of affordable homes by three agencies, PRIMA, SPNB and Jabatan Perumahan Negara, of which RM500 million for PRIMA to build 80,000 homes in Shah Alam, KL, JB, Seremban, and Kuantan.
Malaysia First Home scheme entitlement increased from RM3,000 to RM5,000 income bracket and an increase to 15% RPGT for sale of home within the first two years after purchase and 10% after 2-5 years. No RPGT after 5 years.
Innovative creation of excess demand in the local market for housing development of cheaper homes prompted when the government first announced the affordable housing scheme last year, which saw a few big developers such as MK Land gearing up in the supply of RM200,000 to RM300,000 affordable home schemes across the nation. I expect more home developers will be joining the rank to supply these affordable homes in time to come taking advantage of the excess demand in the local home property market.
In short-term, as supply of the affordable homes remains small that keeps home prices buoyant and active. It is unlikely therefore home prices in the local market to drop favorably for middle-income group in taking the advantage of the recent budget in buying suitable homes for family living.
My prediction is that in the next two years average home price of double storey homes will be in the region of RM400,000 to RM450,000 per unit in Klang Valley, RM300,000 in JB and RM550,000 per unit in Penang as compared to RM 550,000 – 660,000, RM390,000 to RM400,000 and RM680,000 the regions, respectively.