I’m jaded about the Budget’s housing initiatives, what about you?

I’m jaded about the Budget’s housing initiatives, what about you?

-REENA KAUR BHATT-

It’s that time of the year again when the Federal budget is presented. The PM recently announced RM280.25 billion allocation, where 84% is reserved for operation expenditure and 16% for development efforts.


READ: Property related takeaways from Budget 2018

SEE ALSO: Here’s what the internet has to say about #Budget2018


Granted, there are quite a few initiatives which will greatly benefit us millennials, including the toll fare abolishments, income tax rate cut and PTPTN repayments discount.

However, very few Gen-Ys actually pay any attention when it comes to housing initiatives such as PR1MA, step-up financing schemes and whatnots.

Based on feedback and various conversations with fellow Gen-Ys who fall into the middle-income category (RM3,000 – RM10,000), most don’t even bother to explore these housing schemes/initiatives; EVEN THOUGH this is the group of people who are in dire need of help to secure a roof over their heads.


READ: High Income Nation By 2020 A Pipe Dream, Says Gen-Y


Why Gen-Ys are dubious

The unanimous reason for this phenomenon? We, myself included, do not have much faith in such initiatives. Reasons being, either one of the following happens:

– The hoopla around an initiative announced in the prior years usually fizzles out after some time and there is no proper follow-up/updates

– An initiative is not being carried out properly; inefficient implementation

– There are a few drawbacks to an initiative; consumers might stand to lose in the long-run

Let’s review a few measures announced a year ago under Budget 2017 and their relating concerns:

10,000 homes in urban areas to be rented out to young working professionals

CONCERNS 

 – Where is the follow-up on this and who will be developing these homes? 

 – How do I go about applying for the scheme? –There is no government body/task force put in charge, much less a website for consumers.

 

Construction of 30,000 more PR1MA homes allocated under Budget 2017 (PR1MA’s initial target in 2012 was to build 500,000 homes by 2018, it has now been revised down)

CONCERNS 

– Many of the PR1MA projects’ locations are not feasible for urban professionals as they are located in undesirable locations, i.e far from the city centre and public transportation links.     

– There is also the lack of confidence in delivery, various stakeholders have voiced their concerns and worry over the subpar deliver of PR1MA homes.  Penang State executive councillor  Jagdeep Singh Deo, recently highlighted that only 0.2% of the promised homes amount has been delivered so far, from 2012. 

Special step-up financing scheme for PR1MA homes

CONCERNS

– Many think twice about utilizing the money from the Account 2 of your EPF as the loan collateral. Besides dipping into valuable retirement savings, applicants won’t be able to withdraw funds in case of an emergency (medical, child’s education, etc). 

– Due to their nature, step-up loans could actually fuel a housing bubble and result in a higher rate of loan defaults should applicants incomes fail to catch up with time.

READ MORE: Home Loans: Can We Balance Between Financing & Speculation?

 

Full waiver of stamp duty for first-time home buyers, but only for properties costing up to RM300,000

CONCERNS

– Can we even find a suitable residential property costing below RM300,000 in the Klang Valley? Enough said!

 

Here’s how we can make Gen-Ys more invested – Provide transparency and give us assurance 

All said and done, I will not negate the fact that the Government has spearheaded a few promising measures, which have garnered a positive response. For instance, the First House Deposit Financing (MyDeposit) scheme announced in Budget 2016 is aimed to help first-time home buyers to cover the 10% down payment or a maximum of RM30,000, whichever is lower for the purchase of residential properties costing RM80,000 – RM500,000.  According to media reports, the National Housing Department Director-General, Mohamad Yusoff Ghazali announced that they have received 1,046 completed applications for the MyDeposit scheme since it was opened on 6 April 2016 – with a majority of applications from Selangor.

Which is great news and all that, but the government updates stopped there. There was no subsequent reports/news after that on how many of these applicants actually secured a loan, was the scheme successful in assisting homebuyers? 

There was no report published on the successful implementation of this initiative (RM200 million was allocated for the MyDeposit in 2016). Regardless whether this scheme actually achieved its goals or not, Gen Ys on the street will perceive that the scheme and other similar housing initiatives as ‘half-baked’ efforts. Like it or not, the typical educated Malaysian requires assurance and proof that the Government is invested and sincere in its efforts to assist aspiring homebuyers.

The current sentiment on the street, among young working professionals, especially is that most of these government initiatives are introduced just for the sake of doing things. A dangerous trend indeed considering that millennials are the backbone the country and our future leaders. 

For your information, the government has allocated (an undisclosed amount) funds for 2,000 units under the MyDeposit programme. Last year applicants applied for the scheme through the National Housing Department website, which is currently not accessible. We shall see how the MyDeposit scheme is managed this year. 

There should be a proper taskforce in charge of each initiative/measure to see through its successful implementation. Also, there should be an effective communication channel (a website that is up to speed is more than sufficient) for the public to check-up on the initiative’s details, how-tos, progress, future plans, etc. 

Conclusion

I personally feel that it is high time for the government to improve public communication and engagement for all the housing initiatives being introduced. Only then, will we appreciate the country’s Budget. Most importantly, it will help improve consumers’ sentiment and Gen-Ys confidence in the real estate industry too.

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