While providing generous subsidies to low-income families to assist them in buying houses can help reduce the high number of unsold dwellings, it’s not a long-term solution as it can push up home prices and is expensive to maintain on the part of the federal government, experts told the Sun Daily.
“Subsidy can help buyers to tackle the downpayment and interest rates. But subsidy is administratively expensive to implement because you have to allocate a large amount of money to many people considering that Malaysia’s income level is so low now,” said Jarren Tam, senior policy analyst at the Asian Strategy & Leadership Institute’s (ASLI) Centre for Public Policy Studies (CPPS).
“It’s also discriminating if you only help those with a household income below RM3,000. How about those earning RM3,000 to RM4,000? There are not enough funds to subsidise all of them.”
Tam said this during a ASLI-CPPS Housing Policy round table on Tuesday (30 October).
According Democracy and Economic Affairs Senior Fellow Carmelo Ferlito, instead of relying on subsidies, Malaysians should learn to save adequately and adopt a lifestyle befitting their monthly income.
Nawawi Tie Leung Property Consultants Executive Director Saleha Yusoff agrees, adding that giving more subsidies won’t address the issues plaguing the property sector, as Putrajaya is already partly paying for the cost of affordable housing.
“If you ask any developers, the government has already put their share in the construction cost. If the house is RM120,000, likely a high percentage comes from the government, so the subsidy is already in the construction costs. What more subsidy do we need to give to the buyers to sustain these affordable housing development?”
Meanwhile, National Housing Department Principal Assistant Director Ahmad Zafwan Sulaiman revealed that the federal government is currently reviewing subsidies provided to home buyers given Putrajaya’s massive debt of over RM1 trillion.
“We’re collaborating with Bank Negara Malaysia to come up with a new financing scheme to increase the housing loan accessibility to low-income (B40) and middle-income (M40) households.”
This new financing scheme will likely be announced during the budget announcement on Friday.
This article was edited by the editorial team of PropertyGuru. To contact them about this or other stories email editorialteam@propertyguru.com.my
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