Budget lacks measures to revive property slowdown

  • Business
  • Saturday, 22 Oct 2016

Siders: ‘Right now, PR1MA housing is facing various challenges, the biggest being the scarcity of land.’

PETALING JAYA: Despite the measures tabled, Budget 2017 has “missed out” on the opportunity to revive the slowdown in the property market, according to various property consultants.

The Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia (PEPS) said while it is noteworthy of the government to say it will release land at its disposal for affordable housing, the land should be quickly identified and allocated for affordable housing.

“This land should be in urban areas in the Klang Valley and also all the major towns where affordable housing is needed the most,” PEPS said in a statement.

PEPS also said there should be more collaboration between the Government and the housing developers to fast track the construction of affordable housing.

PEPS said it had also anticipated Budget 2017 to comprise more cohesive and holistic measures, such as the fast-tracking of the development of affordable housing.

It urged the government to come up with relevant incentives for builders and developers to build prefabricated houses.

PEPS also said the government must provide enough land to build the 500,000 units of affordable housing as proposed in previous budgets instead of just announcing new schemes and dishing out numbers.

In Budget 2017, the government announced various measures to increase the supply and demand of houses. Among the measures include 30,000 PR1MA homes priced between RM150,000 to RM300,000, another 30,000 units under the 1 Malaysia civil servants housing (PPA1M), financing for first time buyers with a monthly salary of RM3,000 to buy units at RM300,000. This financing scheme involves Bank Negara, the Employees Provident Fund and several local banks.

The government also raised the stamp duty for properties worth more than RM1mil from 3% to 4% effective Jan 1, 2018.

It also announced that it would build 10,000 houses to rent out to urban youths.

“The Government should implement the rental scheme with the option to buy after a few years,” PEPS said.

It also proposed that all Government departments and Government-linked companies should come out with a plan to identify their surplus lands for joint ventures with developers to build affordable housing.

“This will substantially bring down the land cost and assist in the monetisation of the Government land-bank assets.”

Immediate past PEPS president Datuk Siders Sittampalam said despite the various measures with regards to affordable housing, the dire need for this segment was not really being tackled properly by taking the bull by the horns.

Under Budget 2013, PR1MA Corp was mandated to build 500,000 units of affordable housing units by 2018, at an annual rate of 80,000 units a year.

That means a total of 240,000 houses were due to be completed by the end of 2015. The number of completed units was less than 900 at the end of 2015, said Siders.

Therefore, he said the various measures outlined in yesterday budget were just skirting around the issue.

“Right now, PR1MA housing is facing various challenges, the biggest being the scarcity of land. It is unable to gain access to land and we in property consultancy business, feels that the problem should have been tackled at that end instead of just throwing out numbers.

“The government has been saying for years that the 1Malaysia Civil Servants Housing (PPA1M) will be priced between RM150,000 and RM300,000 so this is not something new.

“As for the introduction of this new scheme MyBeautiful New Home for B40 group (with a median monthly household income of less than RM3,000), this is yet another new scheme, in addition to previously announced schemes which never met their targets,” Siders said.

Knight Frank Sdn Bhd managing director Sarkunan Subramaniam said the Government had “missed the point” by not implementing the use of Industrial Building System IBS in the property sector.

“IBS is effective in bringing down costs and increasing efficiency,” he said.

Sarkunan: ‘IBS is effective in bringing down costs and increasing efficiency.’
Sarkunan: ‘IBS is effective in bringing down costs and increasing efficiency.’

Sarkunan, who is also Malaysian Institute of Professional Property Managers president, said infrastructure and accessibility are crucial factors to consider when developing homes for the low income group.

He was commenting on the Government’s National Blue Ocean Strategy (NBOS) initiative, namely MyBeautiful New Home, where houses will be built on land permitted by the landowner or awarded by state governments.

“These people need access to work and transportation is important for them.”

Axis REIT Managers Bhd head of investments and Malaysian Institute of Estate Agents immediate past president Siva Shanker also concurred that the Government should have come up with more incentives to stimulate a slowing property market.

“The Government could have announced measures to kickstart the secondary market, as there is a lot of pent-up demand there.

“There are a lot of properties within the secondary market that is within the affordable range,” he said.

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