theSun Property October 2016

5 / 5

23
theSun ON FRIDAY | OCTOBER 28, 2016
Budget2017
observations
andopinions
>Views of industryprofessionals on allocation
for housing andproperty
THEREis always twoways (or
more some say) to look at
things. Since the recent
announcement of next
year’s budget, many have aired their
opinions. The general consensus is
1) Through the National Blue
Ocean Strategy (NBOS), the
government will provide
vacant land at strategic
locations to government-
linked companies (GLCs) and
Perumahan Rakyat 1Malaysia
(PR1MA). This will go towards
building more than 30,000
houses, and sold from RM150k
to RM300k, below the market
price of RM250k to RM400k.
2) The government has plans to
build 10,000 houses in urban
areas. These will be offered to
youth who meet “eligibility
requirements”, including
graduates entering the labour
market and who hold
permanent jobs. Rental is up to
a maximum of five years at a
lower than market rate.
3) Under the People’s Friendly
Home (PMR) scheme, 5,000
house units will be built of
which the government will
subsidise up to RM20k per
unit.
4) Stamp duty exemption to be
increased to 100% on
instruments of transfer,
compared to 50%. Exemption
limited to houses valued up to
RM300,000, and for first-home
buyers only, valid from Jan 1,
2017 to Dec 31, 2018.
5) The rate of stamp duty on
instruments of transfer of real
estate worth more than RM1
million will be increased from
3% to 4% effective Jan 1,
2018. This is said to affect sales
for high-end properties and
probably spur demand to buy
ahead in 2017.
6) A new, “step-up” end-
financing scheme for the
PR1MA programme will help
reduce loan rejection
rates. The new application is
said to begin on Jan 1, 2017
and will collaborate with the
government, Bank Negara
Malaysia, Employees
Provident Fund and four local
banks, namely AmBank,
Maybank, CIMB and RHB.
Financing will be easier, more
accessible, providing loans of
up to 90% to 100%.
7) A grant amounting up to
RM10k will be re-introduced to
registered Residents
Associations. This can be used
for purchase of security control
equipment, cleaning and
maintenance of the
neighbourhood.
8) Higher housing loans for civil
servants – between RM200k
and RM750k from the previous
range between RM120k and
RM600k.
9) The government expects to
complete the construction of
30,000 units of 1Malaysia
Civil Servants Housing
(PPA1M), to be sold from
RM90k to RM300k, or 20%
below market price.
10) A RM200 million allocation
will go towards MyBeautiful
New Home scheme,
introduced for the B40
(bottom 40% of households
earning monthly income of
RM3.9k and below). The
programme will begin with
the construction of 5,000
house units (priced between
RM40k and RM50k each).
Under this scheme, the
government will finance
RM20k while owners can
service the balance of the
instalments. Houses to be
built on the owners’ land;
land permitted by the
landowner; or land awarded
by state governments.
11) The Urban Wellbeing,
Housing and Local
Government Ministry will be
allocated RM134 million to
build another 9,850 houses
under the People’s Housing
Programme (PPR).
12) Under the People’s Housing
Programme (PPR), 11,250
houses are already being
built. These will be sold
between RM35k and RM42k,
which works out to be below
construction costs.
IMPACT AND
EXPECTATIONS
On items 1, 2 and 3, JLL country
head YY Lau said that these
schemes will surely help
alleviate the shortage of
affordable homes and allow
middle-income earning
Malaysians to own a
house. “It will increase
property ownership,
spending of the rakyat on
housing products.
Construction companies
and developers will
likely benefit from this
and development projects
will spur domestic
investment activity which
in turn will contribute to
the GDP supported by private and
public investments.”
Her view on the “step-up”
financing scheme is that it will
improve loan approvals. “Stamp
duty exemption is also likely to
help spark property investments in
2017, hence, contribute to stronger
construction and economic activity
next year.” On the increase in
stamp duty (as in item 5), Lau says
that this is likely to have an adverse
effect on investors when
introduced in 2018, “similar to the
impact of GST on retail”.
“In the shorter term, I expect
more transactions above RM1
million may be completed before
the implementation date.
Otherwise, developers may resort
to selling slightly below the RM1
million threshold to avoid the tax
after 2018.”
While Lau expects the
constructin of the Pan Borneo
Highway to help hike tourism and
economic activities between Sabah,
Sarawak and Brunei, she doesn’t
deny that the proposed East Coast
Rail Line has been drawing
attention. Business economists
expect economies to improve
especially in areas where the
600km rail track will run across,
connecting the Klang Valley to
towns like Kuantan, Kuala
Trengganu and Kota Baru, ending
in Tumpat in Kelantan near the
Thai border.
VIEWS AND OPINIONS
While Lau feels that the budget for
2016 was pro-poor, benefitting
simple folk living in rural areas, as
well as women, students, civil
service employees through
handouts and providing low-cost
housing and housing programmes
to encourage
home ownership, it
also provided for
railway lines
and trains to
help boost
connectivity,
growth,
domestic
demand
and the
economy.
“The 2016
budget was
crafted to
help raise
GDP to 5%
in 2017 as
opposed
to the
unexpected growth of 4% to 4.5%
in 2016.” On the recent budget
announcement, Lau felt that the
government has continued to
restrain spending, “budgeting for a
3% fiscal deficit”. Her overall view
– “It accelerates growth, ensures
fiscal prudence and enhances the
well-being of the rakyat.”
Sharing his view, IJM
Corporation Berhad CEO and
managing director Datuk Soam
Heng Choon said: “We applaud the
government’s effort to provide
more affordable housing projects
catering to both the B40 andM40
group. The step-up financing
proposal for PR1MA homes will
further encourage higher eligibility
for loans to enable ownership.
First-time home buyers will further
benefit from the 100% stamp duty
exemption for the first RM300,000
for purchase of property
RM500,000 and below.”
REAGroup’s international
COOArthur Charlaftis however
commended the government in
taking measures to assist first-time
home buyers via the “step-up” end-
financing scheme and increasing
the number of affordable houses.
“Budget 2017 has certainly made it
easier for first-time home buyers to
own a home. Even though the
Developer Interest Bearing Scheme
was not reintroduced and no new
measures were crafted to curb
escalating house prices, the
government has introduced other
measures to make it easier for first-
time home buyers to get into the
property market,” he said.
that there is nothingmuch to shout
about.
Although reports across media
platforms quoted industry
professionals who viewed the
financial budget as “muted,
relatively neutral in impact, not
enough to excite themarket,
measures insufficient to stimulate
the propertymarket” and so forth –
this writer is one who sees the glass
as half full. With that, we run
through Budget 2017 and changes to
expect in 2017 where property is
concerned, along with views of
various industry authorities.
JLL’s Lau.
Email your feedback and
queries to: propertyqs@
X
PERTAINING PROPERTY
PHOTO: WWW.BAJET.COM.MY
PHOTO: WWW.PPA1M.GOV.MY
PPA1MRantau Panjang.