Financing help and strategic housing plan top Budget 2018 wish list


Financing help and strategic housing plan top Budget 2018 wish list


Datuk Seri Michael Yam, Chairman of Triterra Sdn Bhd and Immediate Past President & Patron of REHDA

• The government should review, rationalise and harmonise all the Acts and legislation governing and regulating the business of housing development and the latest Strata Management Act which has inhibited the smooth and speedy development process and its inability to respond to market changing conditions.
• All bodies, departments or government entities involved in the delivery of affordable housing should be consolidated and centralised to avoid oversupply, mismatch or unwanted assets.
• Establishing a sustained programme for educating the public and consumers to assist them in making an informed judgement on what to buy, when to buy, where to buy and who to buy from.
• It would be timely for developers to be gradually relieved of the need to provide affordable housing, thus enabling developers to optimise efficiency with the resultant profits being taxed and ploughed back into affordable housing.
• There is also a need for new planning guidelines and legislation for retirement homes to encourage, optimise and quicken the development of such special asset class as Malaysia will evolve into an ageing nation by 2030.


Warrick Singh, Director of Asian Land Realty Sdn Bhd; Asian Land Auctioneers Sdn Bhd and Starfish Training Sdn. Bhd

• Malaysia has quite a few tracts of undeveloped wakaf land (inalienable endowment land in Islamic jurisprudence). These land is being left idle and should instead be utilised for the development of residential properties, of which should be rented out to the right target groups, i.e Gen-Ys, fresh graduates and young working professionals.
• I strongly suggest that first-time homebuyers be given a total stamp duty waiver, for properties costing up to RM500,000 and not just the current maximum amount of RM300,000.
• The government’s efforts in improving transportation infrastructures such as the MRT and LRT extensions are commendable. Nevertheless, more effort and proper oversight must be implemented when it comes to last-mile connectivity to ensure proper delivery and full optimization of these connectivity links.



Justin Chang, Co-founder of JETK Innovative Tech

Ensure that all state economic agencies and GLCs (with vast landbanks) who embark on building public housing, remain committed to their cause. Quite a few of these corporations which were set up ‘to provide sufficient homes for the rakyat’, are now competing with private developers by building bungalows and niche condominiums instead.
• Establish a more strategic government scheme housing plan. The Federal and state governments should provide homes tailored and priced accordingly for different buyer segments. For instance,
1) Single working professional/fresh graduates – Studio units not exceeding RM100,000
2) Married couples – 1+1 apartment not exceeding RM200,000
3) Families – 2+1 apartment not exceeding RM300,000
• The affordable homes being built must factor in the location and connectivity issue. Otherwise, young Malaysians would rather rent instead of dealing with an unreasonable commute. In Sydney, one can stay 40 miles away and yet commute easily to the City daily because of the good road infrastructure and availability of a reliable public transport network.
• If the government is serious about the ‘housing the nation’ agenda, then GST should be exempted for properties not costing more than RM500,000 in prime areas, etc (price ceilings can vary according to state and area), thus assisting and encouraging developers in doing their part in building affordable homes for the rakyat.


Peter Phang, Executive Director, UniPacific Corporate Services Sdn Bhd & Group of Companies

• One of the most impactful measures is to relax loan requirements for house buyers. Many are struggling to obtain the required margins of finance, home prices are just too costly even for duo incomers earners with a combined income of RM7,000 or more. Without an adequate loan sum, any other incentives made available will mean little or is of no significance to these aspiring home buyers.
• The Developers Interests Bearing Scheme (DIBS) has been very useful in driving the local property sector forward by enabling many first time buyers to own a roof over their heads. A more refined and carefully revised version of the DIBS which also looks into the long-term sustainable income of a borrower will be worth a second look to address the current housing stalemate.
• A more well-organised and governmental driven public housing scheme is necessary. There has to be a better-planned development projection and timeline and also a more justifiable allocation and distribution to those who are really in need of help to ensure public housing are being distributed to the right segments of people.



Kevin Low, Real Estate Negotiator, Zerin Properties

• The soon-to-be-implemented increase in stamping fees for properties costing more than RM1 million (from 3% to 4%) should be re-examined. Considering the stagnant real estate market, potential purchasers will be even more disheartened to purchase, especially big-ticket units such as commercial properties. A mere 1% increase in the fees would result in an additional RM20,000 for an RM2 million shop-office.
Banks should consider financing the 6% GST property purchasers have to fork out for commercial properties – this will certainly help lower the required initial capital outlay and in turn, encourage more activity in the commercial property sector.
• The GST rule for commercial properties should be tweaked – it is now compulsory for an individual who possesses commercial property or commercial land worth more than RM2 million at market price to pay GST if he/she sells off a commercial property, regardless the price or if it costs less than RM2 million. Instead, GST should be charged only on commercial property transactions costing more than RM2 million.


Low Tung, CEO of Metroworld Realty

• Removing and disbanding the real property gains tax (RPGT) for the next 5 years will encourage transaction activity in a stagnant property market. Due to the economic and industry slowdown, property prices are already falling in certain areas, with many property owners forced to declare bankruptcy as they are unable to secure tenants and service their monthly repayments.
Friendlier investment policies for foreign property purchasers is recommended, this will certainly help bring in much-needed capital into the local real estate industry. The past 5 years have witnessed a decline in foreign investments due to the strict policies set by the government and local authorities. A comprehensive market study should be conducted immediately to ascertain the effectiveness and necessity of these new, supportive policies.
• A decrease in the GST tax charged for commercial properties is necessary too for the stimulation of the property market – many aspiring purchasers are undeterred to purchase due to the 6% tax. Also, construction material for the building of affordable residential homes should be GST exempted. As residential properties are GST exempt, developers have to price in the cost of construction into properties’ selling price, transferring these extra costs to end-purchasers at the end of the day.



Kasshvin Kumar, Unit Trust Consultant (28 years old)

There have clearly been signs of progress in the property sector as we observed various initiatives taken by the government from the previously tabled 2017 Budget. Projects such as MyBeautiful New Home and PR1MA are great indications of more to come; in aid of the lower income segment and more importantly to spur on the idea of property ownership amongst my fellow Gen-Y. Nevertheless, I wish to see banks and developers being more open to the idea of “no money down” or a minimal down-payment housing packages as I believe the greatest hurdle is to raise that 10% down-payment. And given the pace of property inflation, it is always going to be a cruel chase.

The following would be on my wishlist as well:
Up to 100% loan for first time home buyers with healthy Debt Service Ratio
• Most projects to have a certain percentage of units allocated for Gen-Y first home buyers
• More tie-ups with developers to provide subsidized pricing on houses for Gen-Y first home buyers


Wong Yip Kent, Operations Executive, Bridzia Sdn Bhd (27 years old)

It can’t be denied that the government has begun to put in more effort towards assisting Malaysian Gen-Ys with home ownership as shown by the measures announced during last year’s Budget. However, more must be done to make a difference, many millennials are still struggling to secure a home loan.
The government could offer a subsidy for the required 10% down payment to remove this financial burden weighing down thousands of aspiring homeowners. Additionally, the current 100% stamp duty exemption for homes costing not more than RM300,000 should be increased to include homes priced up to RM500,000. This would be a great boost as it is almost impossible to find a home costing less than RM300,000 in most areas in the Klang Valley and other big cities.

Besides that, I would love to see the following happen:
Construction of new PR1MA homes in more strategic locations
• A 100% loan financing for first-time buyers with solid CTOS or CCRIS ratings
• Partnerships with respected developers or special incentives given to these developers to include low-cost homes for projects in prestigious locations


Tan Sri Lim Hock San, Group Managing Director, LBS Bina Group Berhad

• We propose lowering income tax rates as the additional margin in personal income can be used to ease the buyers’ burden when purchasing their homes. Meanwhile, businesses, particularly developers can take the opportunity to reinvest in their business. This move can lead to improved productivity, more job opportunities, boost the quality and quantity of developments besides spurring the growth of the property industry.
• We hope for the easing of cooling measures on the property sector such as the Real Property Gains Tax (RPGT) to further stimulate the local property market and encourage more Malaysians to invest or upgrade their homes.
• The government should lower the minimum threshold from RM1 million to RM500,000 for foreigners looking to purchase homes in Malaysia.
• Additional incentives that will greatly empower first-time home buyers financially and bring them closer to realising their dream of owning a home are the expansion of the stamp duty waiver to include properties priced between RM300,000 and RM500,000. Incentives should also be granted to encourage developers to implement Industrialised Building System (IBS) into their practices.
The government can consider setting up a special fund for developers, with an interest rate of 4%, to aid and encourage more developers, especially smaller players, to build more affordable homes.
• There should be incentives for township developers as they generally invest more in the overall planning which includes the strategic layout of homes, infrastructure, accessibility and, among others. This will encourage more developers to take on more township developments.


Tan Sri Dato’ Sri Leong Hoy Kum, Group Managing Director, Mah Sing

• There should be more flexible schemes for private developers’ projects. There are many good housing schemes in the market such as PR1MA’s Skim Pembiayaan Fleksibel (SPEF) that enables buyers to have higher loan eligibility and a fixed payment for the first 5 years but is only exclusive for PR1MA projects. Such incentive should be extended to private developers with units that are priced below RM500,000.
• We hope the government will be able to loosen mandatory obligations to ease developers’ burden on compliance costs such as contributions for utilities including TNB, Syabas and IWK, developer charges, land conversion premiums, surrender of land and construction of facilities as these charges represent heavy compliance costs. All these would result in cost savings that can be passed directly to home purchasers with more affordably-priced properties.
• In the property industry, GST of 6% is not imposed for residential projects. However, developers are still required to bear the GST for development cost. We hope the Government will be able to allow developers to claim the GST input tax credit for development costs incurred for affordable residential products to lessen developers’ burden.
• The government can consider revising the percentage of funds in Employees Provident Fund (EPF) Account One and Two. By increasing the funds in Account Two from the current 30% to 40% of EPF balances, EPF contributors can have more funds in Account Two to pay the downpayment of their property purchase, to reduce housing loan amounts and pay monthly instalments.

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