Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia (PEPS) president Subramaniam Arumugam said that for a start, the home ownership campaign for the primary and secondary markets should be relaunched.

Subramaniam, who was speaking at the 15th Malaysian property summit here, said the real property gains tax (RPGT) should also be reduced while the Malaysia My Second Home (MM2H) programme should be revisited.

He said that with global inflation and a possible recession on the way, there have been concerns about affordability, cost of living, increases in interest rates and the ongoing Russia-Ukraine war.

“As such, the government’s move to strengthen political stability with accommodative policies, strict enforcement and good corporate governance will be fundamental for improving consumer and investor confidence in the country,” he said.

Subramaniam said the property overhang is still a matter of concern. “It has led to many industry players adopting a cautious approach, and that in turn drove the cost of property upwards,” he said.

However, he said, millennials aged 40 and below still account for a large proportion of the population and they are potential buyers of unsold projects.

He said incentives could be given to boost a potential buyer’s capability to own property. This, he added, would also be a boost for sellers looking to dispose of their property.

At a press conference later, Subramaniam said China’s reopening on Jan 8 had raised hopes of a return of Chinese real estate investments to Malaysia.

He said the 2021 decision by the government to reverse its policy that tagged visa with home purchases had damaged the country’s reputation in the eyes of foreign investors, particularly the Chinese.

For instance, he said, the Forest City project in Johor that targeted foreign buyers, especially the Chinese, is now seeing a decline in sales as a result of hasty policy changes.

The MM2H programme, which was introduced in 2002, has brought in investments of RM40.6 billion through property acquisition and compulsory fixed deposits in local banks. As of 2020, there were 39,000 participants in the programme, and they have spent almost RM5 billion a year on rent, vehicle and property purchases and services.

“The decision in 2021 to reverse the policy has really affected the trajectory of growth in the sector,” Subramaniam said.

He said there is a need now to revisit the policy framework to attract quality investments into the country.