Boost to affordable housing
CATALYSTS: 100pc stamp duty exemption and special end-financing scheme under PR1MA programme
THE government’s affordable housing plan have gathered more momentum with several new initiatives announced in the 2017 Budget to help stimulate the property market.
Industry players have been expecting the market this year and next to remain slow due to global sentiments, but anticipated buying interest to improve, especially in the low to middle-range properties.
According to the 2015 Property Market Report by the National Property Information Centre (Napic), Malaysia’s property market transaction volume fell 5.7 per cent to 362,105 last year compared with 2014, while overall property transaction value fell eight per cent to RM149.9 billion last year from RM162.9 billion in 2014.
Transaction volume for the residential sector declined 4.6 per cent, while commercial property transaction volume was down by 10.6 per cent last year.
The report showed that there were 11,316 overhang residential units worth RM5.9 billion, up 16.3 per cent in volume and 56 per cent in value, from 9,733 units worth RM3.78 billion in 2014.
It is expected that overhang units in the property market will continue to rise this year if developers continue to launch highend projects.
The general consensus is that many are unable to afford highend properties, especially those individuals in the low- and middle-income group.
The budget, tabled by Prime Minister Datuk Seri Najib Razak on Friday, focuses on increasing house ownership among first-time house buyers and those in the lower income group.
Najib announced that the stamp duty exemption will be increased to 100 percent on instruments of transfer and housing loan instruments, to help reduce the cost of first house ownership, compared with 50 per cent at present.
The exemption is limited to houses with the value up to RM300,000 for first house buyers only for the period between January 1, next year and December 31, the year after.
The National House Buyers Association (NBA) lauded Najib's announcement of a full waiver of stamp duty for first-time house buyers.
Mah Sing Group Bhd group managing director cum group chief executive, Tan Sri Leong Hoy Kum said, said a 100 per cent stamp duty exemption for houses under RM300,000 as versus to 50 per cent currently will help spur demand in the property market.
“We have projects under the Rumah Wilayah Persekutan programme in Lakeville Residence, Taman Wahyu, Rumah Selangorku Programme in M Residence 2@ Rawang, Southville City@ KL South as well as our Rumah Mampu Milik Johor in Meridin East which will The 2017 Budget initiatives are expected to house ownership for the bottom 40 per cent household income group.
definitely benefit from this,” said Leong.
The stamp duty increase for houses worth more than RM1 million will encourage advance buying of completed properties prior to January 1 2018, he said.
“Some of our remaining units in M City in Jalan Ampang, Aspen@ Garden Residence and Icon Residence, Mon’t Kiara will benefit from this, as buyers will be driven to make a faster purchase in order not to be charged the higher stamp duty rate,” said Leong.
The government will be introducing several concepts to enhance firsttime
house buyers’ affordability.
The first step is to provide vacant lands at strategic locations to government-linked companies (GLCs) and Perumahan Rakyat 1Malaysia (PR1MA) to build more than 30,000 houses through the National Blue Ocean Strategy (NBOS).
These houses will be priced between RM150,000 and RM300,000, which is much lower than the market price of between RM250,000 and RM400,000.
Najib said PR1MA has been wellreceived by the rakyat.
To date, more than 12,000 units worth RM3.3 billion has been booked, while 85,000 units are at various stages of approval.
A new special “step-up” end-financing scheme has been introduced for the PR1MA programme to encourage house buyers.
This scheme is a collaboration between the government, Bank Negara Malaysia, the Employees Provident Fund (EPF) and four local banks, namely, Maybank, CIMB, RHB and AmBank.
Tengku Datuk Seri Zafrul Aziz, the group chief executive of CIMB group said he was happy that the banking outfit was chosen as one of four Malaysian banks to provide PR1MA end-financing to facilitate house ownership among the lower income group.
“In Asia particularly, house ownership is perceived as part of a sound retirement plan, and with these initiatives, the Malaysian government is clearly taking a long-term view on helping the rakyat with their lifelong financial planning,” he said in a
and encourage statement.
The Real Estate and Housing Developers’ Association of Malaysia (Redha) president Datuk Seri FD Iskandar said the initiatives announced would improve the accessibility of first-time house buyers and encourage house ownership for the bottom 40 per cent household income group (B40).
He said in a press conference following the budget announcement that the 100 per cent stamp duty exemption for first-time house buyers of below RM300,000 would spur the growth of the property sector.
However, he hoped that it would also be waived for properties of a higher threshold, taking into account the higher house prices in major cities.
Meanwhile, the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector (PEPS) was expecting more measures to be announced in the 2017 Budget.
They expected the government to re-introduce DIBS (Developer Interest Bearing Scheme) for first-time buyers for the purchase of houses priced below RM400,000.
PEPS was also hoping that all the government departments and agencies including the GLCs would introduce a plan to identify their surplus lands for joint ventures with developers to build affordable houses.
The proposal would have substantially lowered land cost for developers and unlock the potential of government land-bank assets, said PEPS in a statement.