“It is harder for lower-income groups to purchase properties due to stringent regulations imposed by Bank Negara,” said Abdul Rahman. He illustrated how some middle and higher income groups have abused the loophole in the People’s Housing Project (PPR) system while their income level allows them a better chance to secure a bank loan.
“I appeal to the central bank (Bank Negara Malaysia) (BNM) to not regard loans to the lower-income groups as mere commercial transactions, but more of a way to transfer and balance the nation’s wealth when low-income groups could own homes,” he added.
“There will also be a task force set up next year to perform a detailed study on the status of residents living at PPR properties. The owners will be identified and the residents will be queried if they have rented out their units or sold the houses before the moratorium expired,” said Abdul Rahman. The minister said the study is expected to take between six months to a year, and evaluation, as well as follow-up actions, will be carried out by the Nation Public Housing Management Corporation (3PAN).
WILL DIBS MAKE A COMEBACK?
In a question and answer session with the press, the minister was asked if the ministry consulted property experts’ advice on handling the affordable housing issue, Abdul Rahman revealed that there are ongoing talks between his ministry and the Real Estate, Housing and Developer’s Association (REHDA) committee members.
“There are ongoing talks between REHDA and the government if the Developer’s Interest Bearing Scheme (DIBS) should be reintroduced to curb the affordability issue.” The DIBS was banned in Budget 2014 to curtail the risk of creating a property bubble as house prices can be artificially increased – thus creating a snowball effect.
EXPLAINING BUDGET 2016 ALLOCATION ON PR1MA
The Housing Minister addressed critics on the budget allocation on 1Malaysia Housing Project (PR1MA) who panned the RM1.6 billion provision for affordable housing is too little for the programme.
“The budget allocation for affordable housing is addressed for 2016, and there will be follow-up budget allocation for the year after and the following year,” he clarified.
Abdul Rahman elucidated that a housing project cannot be completed in a year, as on an average basis it will take approximately 3 years to complete.
“The current allocation of RM1.6 billion is for foundation costs of the affordable housing projects and there will further and escalating budget to be injected into the developments built under PR1MA.” The government subsidised house ownership programme will see 175,000 house units built under PR1MA and sold 20% cheaper than the market price.