With the impending arrival of Federal Budget 2019, StarProperty.my invites the public and stakeholders of different industries to contribute their thoughts on how should the government spend or save the money.
Contributed by IQI Group property investment coach Sean Lee
Budget 2019 Wishlist 001: Malaysians want cheaper homes
FOR the first time, we have witnessed a change of the ruling government since independence day; its first budget under the Pakatan Harapan (PH) government is much awaited.
While the government has stressed that the immediate task is to reduce the government debt level and reduce spending, it has courted different response from all sides. I shall make a wishlist from a property perspective.
- Sales and Service Tax (SST) - The newly minted Finance Minister Lim Guan Eng has recently announced in Penang that the price of properties above RM300,000 and below RM300,000 is expected to drop by 10% and 6% respectively. This was after the implementation of the SST.
It has created a significant impact in the property industry as many are now either cancelling their property purchase or adopting a wait-and-see approach.
While we do understand the good intention of the government for making housing more affordable to the public, we must also understand that any drastic intervention from the government in today's free market is often proven futile, or even harmful sometimes.
We must remember that the relationship between the developers and the public is not a zero-sum one. Needless to say, developers contribute to the coffers of the nation; it also represents hundreds, if not thousands, of various supporting industries behind it.
A drastic drop in property sales will hurt more industries than we would probably expect, including the people we know on a daily basis.
- Cutting national debt - While the government has made it clear that their priority is to reduce the government debt level, we are also hoping to see more concrete plans being put forward to encourage economic growth through spending and investment, both domestic and overseas.
- Trade war - As I am writing this article now, the US president has announced the latest tariff slap on China's USD200bil. No one could foresee the full impact of the ongoing trade. Nevertheless, we shall not underestimate the assessment made by Alibaba's founder Jack Ma that this trade war will have a longer time frame and it shall be more significant than everyone is expecting.
Some argue that the trade spat between the two greatest economies in the world will even benefit Malaysia's manufacturing line. If that could be the case, we hope that the government can announce some proactive action plan to attract the possible shift of production to our shores.
About the Contributor
Sean Lee
Sean Lee is a property investment coach from IQI group.
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