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ON FRIDAY
OCTOBER 17, 2014
T
HE
recent Budget 2015
announcement saw the
nation, including industry
leaders, regular “Joes” and
“Janes”, apprehensive and eager to
learn of its content and constitution.
Will the changes benefit or burden
individuals, industries and factions
of society?
theSun
features the
views of Real Estate and Housing
Developers’ AssociationMalaysia
(REHDA) president Datuk Seri F.D.
Iskandar, CHWilliams Talhar &
Wong (WTW) managing director
Foo Gee Jen and National House
Buyers Association (HBA)
honorary secretary-general Chang
Kim Loong.
REHDA
Iskandar lauds the government’s
move in introducing the
Youth
Housing Scheme
in Budget 2015.
“This
smart partnership between
the government, Bank Simpanan
Nasional, the Employees
Provident Fund and Cagamas
will certainly benefit young
coupleswhowish toown a home.
Apart fromthe 10% loan
guarantee that enables
borrowers to obtain full
financing (including cost of
insurance), the RM200monthly
financial aidwill be helpful,
especially to those living in
urban areas and those struggling
to copewith the rising cost
of living
.”
REHDAwelcomes the various
incentives andmeasures,
particularly those related to the real
estate and property sector. It
believes the
newmandates will
have a positive impact on the
industry, especially inpromoting
home ownership among the
lower andmiddle income group,
as well as improve the quality
of life of the rakyat
. “We also
appreciate the effort made to
raise the ceiling of household
income fromRM8,000 to
RM10,000 for PR1MAhomes.
We believe it will
open up further
opportunities
formore
purchasers
to own
affordable
housing
.”
Iskandar is also
happywith the
introduction of
the Rent-To-
Own Scheme,
which he says will
help thosewithout the
ability to obtain financing
.
Other applauded projects and
programmes include:
the extension of 50% stamp duty
on instruments of transfer and
loan agreements; with an
increase of purchase limit from
RM400,000 to RM500,000 to
Dec 31, 2016, whichwill spur the
growth of the housing and
property sector, especially the
affordable sector;
increase of price limit of theMy
First Home Scheme to
RM500,000, looking at the
increased costs of development;
borrower’s eligibility raised to
40 years from35;
facilitation fund of up to 25%
from the project cost, whichwill
increase private sector
developers’ participation in the
1Malaysia Civil Servants’
Housing (PPA1M) projects;
allocation of RM1.3 billion for
building 80,000 units of PR1MA
homes, RM644million for 26,000
units of People’s Housing
Programme (PPR) homes and
provision of RumahMesra
Rakyat, Rumah Idaman Rakyat
and RumahAspirasi Rakyat by
Syarikat PerumahanNegara
Berhad (SPNB); and
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the federal government’s
move to spend RM76
billion in infrastructure
projects across the
country.
Pledging its full
support inworking
together with the
government in
assisting the delivery
of more affordable
housing,
REHDAhopes
the government will
consider its appeal to take
on the role of social housing
. “On
our part, we request that private
developers be allowed to pay a
certain sum to either the state or
federal government, in lieu of not
building lowcost … as currently
practiced byDBKL.
“
We look forward to a level
playing field and are keen to
engage the government more,
for the benefit of the rakyat and
the industry
,” said Iskandar.
WTW
Commenting onDatuk Seri Najib
Abdul Razak’s announcement that
the government has agreed to spend
RM279.3 billion, with up to
RM9.8 billion aimed at “accelerating
growth, ensuring fiscal
sustainability and prospering the
rakyat”, WTW’s Foo said that
little
wasmentioned of GST in the
budget, although the
undercurrent of concern as to its
impact on the cost of living in
2015 cannot be ignored
. “Although
residential properties are zero-rated
for GST, materials and services
supplied in the development
process will be subject toGST and
these costs are likely to be passed on
to home buyers. However, the
extent of its effects are unclear,”
says Foo.
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He
mentioned
the various
affordable homes
projects that were
planned. “Together
with the 130,195 homes
proposed in 2013,
the government
will provide new
housing to about 1%
of the population per
annum for the next
four years, compared to our
current population growth rate
of 1.3%. Looking at the population
aged 25 to 29 years, which is about
12%of the total population, and the
estimate of 30%of these households
being potential first time buyers
(figures by an established property
marketing service), the need for
affordable homes was identified at
about 330,000 units. The above
programmes appear to have
adequately addressed the
requirements of first time home
buyers but plans must bematched
by actual deliveries. We note that
of the 126,000 units proposed in
2013, only about 10,000 commenced
construction in 2014. To bring
the plans on track, commencement
of affordable homes construction
in 2015 will need to be stepped up
to 120,000.” Foo’s concerns:
the
actual number of affordable
homes constructedmay fall far
below target
.
Like Iskandar, Foo applauds the
YouthHousing Scheme but says:
“Its availability of only 20,000 units
is amajor limitation. This number
should be doubled.” He adds that
an additional condition for
eligibility of this financing
scheme should bemandated.
“Houses bought should be
owner-occupied.” However,
he feels that thementioned
schemewas a better decision
compared to re-introducing
DIBS.
Foo is all praise for the
many affordable home projects
and financing schemes to help
home buyers purchase a roof
over their heads, but he also
points out that buyers should be
educated on good financial
management, otherwise “the
easy terms of loan financing
with these schemesmay lead to
excessive debts and inability
to repay loans
”.
On the Rent-To-Own scheme,
Foo thinksmore details on the
operation should be studied …
“especially the implications when
the ‘tenant’ requires a bigger home
after a fewyears due to a larger
family. The ‘tenant’ may be unable
to break the tenancy agreement and
risks losing the option to purchase
at the end of 20 to 30 years”.
In 2015, Real Property Gains
Tax (RPGT) will be self-assessed.
Foo cautions prospective sellers to
seek expert advice and guidance
on themarket value prior to
completing a sale. “It will
minimise the riskof undervaluing
your property and being
penalised for under-payment
of RPGT
.”
The budget has much planned
for East Malaysia. Foo believes
these will cater to the expected
increased traffic in viewof the
Year of Festivals. It will also help
the country achieve its 29.4million
visitor target and RM89 billion
tourists receipts. “
The budget also
announced tax exemptions of
70% to 100% for a period of five
years, for themanagement of
industrial estates. This should
encourage better management
and gated and guarded industrial
parks, and attract more logistics
operators. Bettermanaged
industrial estates will also
encouragemore industrial
developments and investments
in general
,” he adds. On themany
infrastructure developments,
Foo believes that these will create
additional wealth and spur new
opportunities for residential
developments.
Follow our column next week
for comments from the National
House Buyers Association (HBA)
honorary secretary-general.
>Differingviews and comments from industryprofessionals
Property andhousing
in
Budget 2015