theSun Property October 2015

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ON FRIDAY OCTOBER 30, 2015
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Budget 2016 PART1
WITH regard to the
recently announced
Budget 2016, here are
views and comments
fromnational House Buyers
Association (HBA) president
Chang KimLoong. “On behalf of
HBA, we acknowledge the
challenges faced by our prime
minister in tabling Budget 2016 in
viewof the global economic
slowdown, along with the steep
drop in the value of the ringgit,”
said Chang.
Below are HBA’s views on
Budget 2016.
The budget’s new/additional
positive take in relation to
property include:
1) Increase in construction of
affordable homes under the
PR1MA, SPNB, PPA1Mand PPR
schemes; and
2) the “First Home Deposit
Scheme”, whichwill receive
RM200,000 to assist first-time
home owners make their
deposit when purchasing
affordable housing.
Other areas surrounding the
property sector which have been
retained and have the people’s
interest at heart include:
a) The Developers’ Interest
Bearing Scheme (DIBS)
The government will continue
to prohibit any permutation that
entails interest capitalisation,
including the DIBS.
“Developers, being
entrepreneurs, should bear the
risks that come with investment
and not be allowed to enjoy profits
at the expense of house-buyers
bearing the risks on their behalf,”
expressed Chang.
For developers who feel DIBS
should be allowed, claiming it
“assists newpurchasers”, Chang
recommends these developers use
the Build-Then-Sell (BTS) 10:90
concept if they are sincere in not
wanting to shift the risks to house
buyers.
b) Affordable homes by
the government
The primeminister announced
that more affordable homes will be
built by government-linked
developers and agencies.
However, HBA had its
reservations expressing that the
right implementation plans need to
be heeded in order for affordable
housing to reach and benefit the
right target market. “The right
product must be built at the right
place with the right numbers,”
voicedHBAmembers.
Its recommendation: reasonable
prices between RM150,000 to
RM300,000, not exceeding
RM400,000 andONLY for first-
time house buyers and not second-
time house buyers which PR1MA
allows with certain conditions.
HBA also felt that PR1MA
should ensure all allocated land
be used for affordable housing
instead of partnering with private
developers where some are said
to apportion only 40%of the land
area to build affordable houses,
the rest used for lifestyle
properties, commercial and
high-end developments.
HBA also opined that the
government should boost the
delivery of affordable housing by
giving incentives and rebates to
private developers such as
lowering corporate tax rates of
these developers; reducing land
conversion premiums; and
applying fast track release of
unsold bumiputra units.
c) First Home
Deposit Scheme –
10%
Though claimed a
laudable scheme that
assists first-time home
owners to come
upwith a 10%
deposit, HBA
advises some
caution be taken
as it may send the
wrongmessage.
“HBA has always
felt that Zero
Cost Entry
properties where
buyers do not
need tomake any
down payment will
encourage speculation.
House buyers should rent if
they cannot raise the initial
down payment or meet the
commitment fee for an affordable
house.”
The association also raised
concerns stating that the
government’s obligation should be
focused on providing housing for
households earning less than
RM10,000 amonth. “Buyers should
bear inmind the back-breaking
loan spanning 30 years and not
blindly jump to sign a 100% loan
agreement (in this case 90%
margin). Remember your
obligation to repay themonthly
mortgage, besides themaintenance,
sinking fund, utility charges and
so forth.”
HBA also reinforced its voice on
the 10%First Home Deposit
Scheme. It advised the people:
“Think thrice before buying a
house if you can’t even come up
with the 10%down payment. Rent
if you can’t afford.”
HBA also urges the government
article on Kedah’s green
transformation plan has been
postponed. Followour section for
more information regarding the
property sector in viewof Budget
2016 next week.
>HBA’s views and concerns on its impact on property industry
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to include a clause for houses
purchased under this scheme.
“Such properties under this
scheme should be restricted
from sale within the first 10 years,
similar to PR1MA properties. It
should also be only available to
first-time house buyers and should
be owner occupied.”
Due to the recent announcement
on Budget 2016, part two of the