Is Now The Best Time To Buy A Property?

To boost our economy which hit badly by Covid-19 pandemic, Our Prime Minister Tan Sri Muhyiddin Yassin had launched the PENJANA Economic Recovery Plan. For real estate and housing sector in particular, the RPGT (Real Property Gains Tax) had been exempted for sub-sale houses while stamp duty exempted for purchase of new property from developer.

In addition to stamp duty exemption, Bank Negara Malaysia had cut the Overnight Policy Rate (OPR) further by 25bps to record low of 1.75% in July 2020 is a big advantage if you looking to take a loan to buy a property.

So whether you plan to buy a property now or soon, it’s going to be a buyers’ market for the next few years to get a better deal but is it the best time to buy now?

To answer the question, here are the key facts for property buyers:

1. Revival of the Home Ownership Campaign (HOC)

HOC was a government initiative in 2019, designed to help Malaysians to own a house, at the same time, it also encouraged the sales of unsold properties remain in Malaysia’s housing market.

As announced in PENJANA Economic Recovery Plan , the new extension of HOC is taking effect from 1st June 2020 until 31 May 2021 and basically carries the same criteria and benefits as previous year, notably:

i. The purchase of residential house priced between RM300,000 to RM 2.5 Million.
ii. Exemption of Stamp Duty on acquisition of residential property.
> On the Instrument of Transfer – First RM1 Million of property value
> On the loan agreement – Full exemption
iii. S&P Agreements signed between 1st June 2020 to 31st May 2021.
iv. 10% discount provided by the developer.
v. Purchasers or co-purchasers must be citizen of Malaysia.

Here is how much you can save in stamp duty expenses If you bought a property at RM500,000 with a loan of RM450,000:

With HOCWithout HOC
Down Payment (RM500,000 x 10%)RM 0RM 50,000
Stamp Duty of TransferRM 0Rm 9,000
Stamp Duty of LoanRM 0RM 2,250
TotalRM 0RM 61,250
Total Saving Under HOC

2. Lowest Interest Rate Ever For Your Home Loan

With Bank Negara Malaysia cuts the Overnight Policy Rate (OPR) further by 25bps in July 2020 to a record low of 1.75%, compare to 3.25% just a year ago.

This low bank lending rate is a huge advantage if you buying a house with a loan as it could either reduce your monthly installment or reduce you loan term if you remain your payment amount as before.

With a total cut of 150bps on OPR, you will save up to RM 377.9 installment per month for a loan of RM 450,000.

Loan AmountRM450,000RM450,000
Loan Tenure30 years30 years
Interest Rate4.3%2.8%
Monthly InstallmentRM2,226.92RM1,849.02

3. Up to 90% Financing Limit Lifted For Third Property Onwards

Previously, property investors were limited to 70% financing for their third property onward, but now investors can get a loan up to 90% of the purchase price if the property priced above RM600,000. This will make a big different to investor on preparation of upfront cash to buy.

So regardless how the property market is performing, the best time to buy a property is when you are financially ready and take advantage of current policy.