Property prices cool in malaysia

Property prices are cooling in Malaysia following years of rapid growth. The country's strong economy and established business Centre attracts companies to the city, driving up demand for real estate.

Now, though, a range of cooling measures from officials are causing property prices to soften. The Real Property Gains Tax is at the Centre of the moves, imposing a 30 per cent charge on net gains from property sold within three years of purchasing. Minimum purchase prices for non-residents have also been doubled to 1 million ringgit, reports the South China Morning Post, in an attempt to encourage long-term investment rather than short-term speculation.

As a result, demand and values are declining.

Nicholas Holt, Knight Frank's Asia-Pacific head of research, cites additional factors to the tax as helping to lower demand from buyers, but agents are welcoming the slight dip.

Siva Shanker, president of the Malaysian Institute of Estate Agents, told the newspaper: "The market had come off the boil last year even before October's budget announcement," adding that the cooling of the market is a good thing following such a heated period.

"The fundamentals cannot hold that sort of growth. If we'd carried on at that level, the market was going to crash - inevitably, the proverbial bubble would burst."