Property measures set to boost overseas purchases
BUBBLE CONCERNS: Weaker ringgit will also be an incentive, says Henry Butcher Malaysia
STRICTER policies by the government to cool the hot property market will spur buying interest overseas, says Henry Butcher Malaysia chief.
This is because more locals would likely to channel their funds overseas and invest in properties.
"New cooling measures will only encourage people to start buying overseas, especially in London where the economy is improving. When Hong Kong and Singapore introduced cooling measures to curb speculation, people started to buy in foreign markets," Lim Eng Chong said.
He was speaking at a briefing yesterday to introduce a new project in London, called City Island, by UK developer Ballymore Group.
Maybank Investment Bank (IB) Research recently downgraded its outlook for the domestic property sector amid uncertainties posed by the cooling measures.
The research house is predicting another round of government's policy tightening to rein in household debt, despite Bank Negara Malaysia insisting that its measures initiated in July have started to work.
Maybank IB warned of further measures to cool down the property market amid concerns of a bubble, including a rise in real property gains tax and stamp duties, which is most likely to be announced in 2014 Budget.
Lim also said that the weakening of the ringgit against the US dollar will encourage Malaysians to buy properties overseas.
"We expect the pound and Australian dollar to strengthen and this will create a stimulus for people to invest in foreign properties. Investors will make more money when they buy foreign properties because of property value appreciation and forex (foreign currency) gain," he said.
The ringgit hit a fresh three-year low on August 14, loosing as much as 0.4 per cent to 3.272 per US dollar, amid broad weakness in emerging Asian currencies.
Analysts expect the local currency to weaken to 3.30 in the next six months.