GOVERNMENT AWAITS DEVELOPERS’ FEEDBACK
130,690 residential units, mostly above RM250,000, unsold in first 3 months
THE government is looking forward to feedback from housing developers, following its move to freeze approvals for luxury property developments.
Second Finance Minister Datuk Seri Johari Abdul Ghani said developers were aware of the sharp disproportion in the domestic housing market in the first quarter.
During the first three months, 130,690 residential units of mostly above RM250,000 were unsold, the highest over the past decade.
“This is not the first time we are doing this check (freeze). Once the level (of unsold stock) drops, we will unfreeze the approvals,” he said at a briefing after the soft launch of HouzKey, an innovative Rent-to-Own product (RTO) by Maybank Islamic Bhd, here, yesterday.
Earlier, he said preliminary feedback from the Real Estate and Housing Developers’ Association indicated that developers had little choice because of land costs, especially in parts of capital city.
“Let us look at the issues at hand once the feedback comes in.
“Overall, the numbers imply that there is a clear under supply of affordable housing in the property market, and increasingly the (median) house prices are beyond their reach,” he said.
Johari added that financial institutions had also expressed their reluctance to finance those high-end projects.
Between the first quarter of this year and last year, only 21 per cent of new launches were for houses priced below RM250,000 with only 35 per cent afford to buy.
“There is a need for all these checks. For instance, shopping malls continue to ‘cannibalise’ one another. And it is due to this ‘diluteness’ the retail industry keeps saying it has not benefited from the robust economic growth we have been enjoying,” he pointed out.
The value proposition now is to explore ways to develop a more robust rental market as only 24 per cent of households rent.
To promote the rental market further, the government gives a 50 per cent tax exemption on rental income up to RM2,000 per month.
To encourage more financial institutions to offer RTO as an alternative home-financing solution, the government will grant a 100 per cent stamp duty exemption to house buyers who attained ownership through this scheme.
Johari said the real property gains tax would be reviewed, too.
Meanwhile, the concept of RTO by Maybank Islamic is developed based on Ijarah and aims to address challenges faced by purchasers in coming up with sufficient downpayments for their new houses.
To be eligible for HouzKey, applicants should have a household income of at least RM5,000 and commit to a minimum rental tenure of five years. They will have the option to purchase the property at a pre-agreed price after one year.
Maybank Islamic is expecting to close at least RM1 billion in portfolio size through this product in the first year. It is slated to be rolled out to the public in early next year.
Also present were Maybank group president and chief executive officer Datuk Abdul Farid Alias and head of global banking Datuk Muzaffar Hashim.