Affordability of low-cost homes remains a pressing issue, said lawyer Chris Tan Chur Pim of Chur Associates in a report by Bernama. In fact, the problem persists despite the many measures implemented by the previous administration.
“The mixed product that was offered in the market was just not sufficient and the affordable range offered by private developers was not a good match.
“We think the homes were build more for the upper B40 group or the lower M40 group because most of the B40 have no access to financing as conventional bank terms were not modelled to meet their requirement.”
B40 stands for the bottom 40 percent of income earners, while M40 means the middle 40 percent of income earners.
“However, since the Pakatan Harapan government (PH) took over, we think the government has been very open in finding alternatives in helping people own their first house and developers too are being assisted in reducing the overhang of properties,” noted Tan.
He said that the federal authorities are trying to introduce housing initiatives similar to those implemented by the state governments of Penang and Selangor. For instance, Selangor launched “Rumah Selangorku” housing scheme, which provides several funding options.
This are among the initiatives that prompted Putrajaya to be more open when it comes to the provision of funding alternatives, and among its fruits is the “FundMyHome” initiative unveiled in the 2019 Budget.
Under this initiative, home buyers only need to pay 20 percent of the down payment for a house, while the remainder will be borne by individual or institutional investors.
“This new loan model is an investment that offers an alternative to house ownership and personally we think it is a good start. However, the details of FundMyHome will only be finalised in the first quarter of 2019,” he explained.
In its 2019 Budget, the federal government also unveiled a number of measures to help the real estate industry. These include a RM25 million funding to Cagamas to provide housing loan guarantee to first-time buyers earning up to RM5,000 per month.
“Coupled with the stamp duty exemption on transfer instruments for the purchase of first houses priced between RM300,001 and RM1 million, it is indeed a step in the right direction towards encouraging people to own properties, which is an effective wealth-creating instrument,” said REHDA President Datuk Soam Heng Choon.
He is also upbeat that the government’s other measures will increase home ownership across the country. These include the stamp duty exemption for home purchases valued up to RM500,000, and funding to assist first-time buyers with monthly household wage of under RM2,300 to buy a residence priced up to RM150,000.
Moreover, he praised other measures that will continue to help groups that need housing. These include the RM1.5 billion allocation for the Syarikat Perumahan Nasional Bhd (SPNB), People’s Housing Programme, Perbadanan PR1MA Malaysia (PR1MA) and Malaysia Civil Servants Housing Programme (PPA1M).
The authorities also exempted construction materials and services from the Sales and Services Tax (SST), on top of agreeing that utility companies should construct their own amenities in a bid to bring down compliance costs for developers. This in turn could slash residential prices.
Meanwhile, Housing Minister Zuraida Kamaruddin launched three new categories of low-cost homes, namely, those priced up to RM150,000, those costing between RM150,000 to RM300,000, and those ranging from RM300,000 to RM500,000.
Furthermore, Zuraida said that all residential developments under five entities will be consolidated under one authority. These five entities comprise SPNB, PPA1M, PR1MA, UDA Holdings and the Hardcore Poor Housing Programme (PPRT).
Image source: Free Malaysia Today
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