PETALING JAYA: More incentives for first-time home buyers, a reduction in the compliance cost, the resumption of the Malaysia My Second Home (MM2H) programme, as well as the reduction of the minimum threshold for foreign property ownership – these are among the items in Mah Sing Group Bhd’s Budget 2021 wishlist.
The group hopes the government will consider these stimulus measures to spur more activity in the property industry, which would then have a larger impact on the wider economy.
The sector has a multiplier effect on more than 140 industries, that is very much reliant on domestic consumption.
In a statement yesterday, Mah Sing founder and group managing director Tan Sri Leong Hoy Kum (pic) said: “We hope the government can introduce additional incentives to complement the existing Home Ownership Campaign to promote home ownership, particularly for first-time home buyers.
“This includes reinstating the maximum loan tenure to 45 years from the current 35 years; a higher debt service ratio; and using gross income rather than net income in loan application reviews.
“We are also hopeful that lending requirements are relaxed to boost home ownership, especially for first-time home buyers, ” he said, adding that the government can also consider implementing a developer interest-bearing scheme (DIBS) for first-time homebuyers, given the current low interest rate.
By doing so, first-time home buyers will not have to service their loan interest and rentals concurrently during the construction period.
Besides that, Leong hopes the government can review and reduce the compliance cost, in line with the government’s efforts to lower housing prices. He noted that the compliance cost remains as one of the most significant factors affecting developers’ cash flow, taking up an average 20% of total cost.
“Apart from land conversion premiums and development charges, the capital outlay for private utilities companies is very high.
“This encompasses the surrender of land, the construction of infrastructure, and contributions to utility companies such as TNB, Syabas, Telekom and IWK. We hope compliance costs such as the capital outlay for private utility companies can be borne by respective asset owners so savings can be passed on to buyers, ” said Leong.
He added that the government can consider resuming the MM2H programme as soon as possible with more investor-friendly policies due to the interest garnered from foreigners in recent years.
The programme will encourage more investments in Malaysia, indirectly helping the recovery of the property market as well.
“We also would like to propose the reduction in the minimum threshold for foreign property ownership to RM500,000 in all states, especially key regions with high overhang like the Klang Valley, Johor and Penang.
“This step would help to improve the overhang situation and continue to stimulate the property market, ” said Leong.
The immediate-term outlook for the economy, which includes the property sector, is affected by challenging market conditions brought about by the pandemic and tight lending environment.
However, Leong highlighted that the mid- to long-term outlook remains positive, supported by strong fundamental demand for property due to the young demography.
“We laud the government’s commitment in taking a proactive approach in introducing various well-rounded economic stimulus packages to regenerate Malaysia’s economy, signalling the government’s continuous efforts to bolster Malaysia’s economy amid the prolonged impact of the Covid-19 pandemic.
“This is essential for Malaysia to recover and move forward from the pandemic, ” said Leong.
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