KUALA LUMPUR: The government's imposition of a four per cent stamp duty on foreign buyers could offset the positive impact of its commitment to relax the existing requirements for the Malaysia My Second Home (MM2H).
Maybank Investment Bank (IB) research said while the less stringent MM2H rules should benefit the domestic property industry in both the rental market and property demand, the imposition of a flat 4.0 per cent stamp duty on foreign buyers, could result in a 63 per cent increase in stamp duty fees for a property priced at RM1.1m/unit).
"However, the impact is not expected to significantly affect property demand due to several reasons," said the research house in a note today.
Foreign buyers account for less than 10 per cent of total property transactions, the depreciation of the ringgit makes properties in Malaysia relatively cheaper compared to neighbouring countries, and the four per cent stamp duty rate is considerably lower than Singapore's stamp duty rate of 60 per cent.
"No change to our earnings forecasts, sector and stock ratings. We continue to favour developers involved in industrial park projects," said Maybank IB Research.
Demand and sale of industrial properties have gained momentum since April 2022, especially after the reopening of international borders.
"We anticipate this strong sales momentum to continue into 2024, driven by increased investment diversion from China due to the ongoing US-China trade war. "Elsewhere, our investment thesis for property stocks with exposure to Iskandar Malaysia and Penang island remain, ahead of announcements relating to the Johor-Singapore Special Economic Zone in end-Oct/Nov 2023, and the final alignment of the Penang LRT by early-2024," it added.
As such Maybank IB maintains a neutral rating on the property sector and its top picks are SP Setia Bhd and Sime Darby Property Bhd .
