Additionally, the scheme must be for “first-time house buyers” and must be owner-occupied.
Additional measures are:
  1. PR1MA to build 80,000 affordable houses and eligibility raised from monthly household income of RM8,000 to RM10,000;
  2. National Housing Department to build 26,000 units under the People’s Housing Programme with an allocation of RM644mil; and
  3. Syarikat Perumahan Negara Bhd (SPNB) to build 12,000 units of Rumah Mesra Rakyat and 5,000 units of Rumah Idaman Rakyat. SPNB will also build 20,000 units of Rumah Aspirasi Rakyat on privately-owned land.
HBA is grateful that the Government has taken the initiative to build more affordable houses. However, HBA cautions on the right implementation to ensure the said affordable housing reaches the target market.

Government agencies must be mindful – and keep reminding themselves – of the following adage: “Build the right number at the right location for the right population at the right price and with the right type.”
The affordable housing must be built at the right place and priced reasonably (between RM150,000 and RM300,000 and not more than RM400,000 for prime locations) and only for first-time house buyers and not to be made available for second-time house buyers which PR1MA is allowing with certain conditions.
Don’t ever build where there is no population, just for the sake of building and meeting key performance indicators (KPIs).
PR1MA must also ensure that all the allocated land are used to build affordable housing and not to partner with private developers whereby only 40% of the land (from what we understand from the market) are for affordable properties with the balance used for lifestyle properties to build commercial and high-end properties.

HBA further opines that the best agent of delivery for private affordable housing, notwithstanding PR1MA and SPNB, are private developers. The Government can boost the delivery of affordable housing by giving incentives and rebates to private developers building affordable housies such as:
  • Lower corporate tax rates;
  • Lower land conversion premiums;
  • Fast-track release of unsold bumiputra units; and
  • Lower compliance costs.
To enable more people to own their first home and reduce the cost of buying a house, the Government has agreed to extend the 50% stamp duty exemption on instruments of transfer and loan agreements and increase the purchase limit from RM400,000 to RM500,000. The exemption will be given until Dec 31, 2016.

HBA agrees with measures to assist the lower and middle-income group to acquire their own properties and to prevent any abuse of these measures, the assistance should only be given to first time house buyers.
The Government also agrees to improve Skim Rumah Pertamaku under the purview of Cagamas by raising the ceiling price to RM500,000 in line with the stamp duty exemption. In addition, the age of borrowers to qualify for the scheme will be increased from 35 to 40 years.

HBA agrees with the these measures and further recommends that there be no age cap as there are many older low and middle-income groups who have yet to own their first property.

Conclusion
The curbs announced and implemented under Budget 2014, i.e. increase in Real Property Gains Tax (exit costs), the loan-to-value and prohibition of DIBS have achieved its objectives in partially deterring speculators and “bogus” house buyers. It has also bought some sense of orderliness to the housing arena.

We have appealed to the Government to adopt more measures in Budget 2015, especially the increase in stamp duties (entry costs).
The current stamp duty regime can be maintained for the first two properties held, one being for own stay and one for long-term investment. However, stamp duty must be increased for the third and subsequent properties. Our recommendation for stamp duty is as follows:
  • First two properties, based on current scale rate;
  • Third property – flat 5% of value of property;
  • Fourth property – Flat 7.5% of value of property; and
  • Fifth property – Flat 7.5% of value of property.
HBA’s proposal will not penalise the majority of the rakyat who can only afford to buy two properties.

HBA is prepared to wait and see the performance of the property market as to whether “speculators and bogus” house buyers will remain to “play” the market. We are sure that our Prime Minister and his advisors are fully aware of the situation and could always expeditiously implement this proposal in Budget 2016 if “speculators and bogus” house buyers were to plague the housing market.
>> Chang Kim Loong is the honorary secretary-general of the National House Buyers Association, www.hba.org.my, a non-profit, non-governmental organisation manned purely by volunteers.



For more information on Building and Construction event, please visit www.asiapacificevents.com