HBA honorary secretarygeneral Chang Kim Loong's views and
stance on several measures are detailed below. He appreciates the prime
minister's wisdom in prohibiting the Developers Interest Bearing Scheme (DIBS)
and his leading the government in the decisions announced under Budget 2014.
DIBS
More than happy with the government and the prime minister's
decision to ban DIBS "or any permutation that entails interest capitalisation," says Chang. He adds that developers, as entrepreneurs, should be responsible
and bear the risks that are generated from their investment. "They should not
be allowed to enjoy profits at the expense of house-buyers bearing the risks on
their behalf. After all, if developers claim that DIBS 'assists new
purchasers', they should be asked to use the Build-Then-Sell (BTS) 10:90
concept... if they are sincere in not wanting to shift the risks to the
house-buyer."
Youth Housing Scheme and benefits for young
buyers
The smart partnership between the government, BSN, EPF and
Cagamas offering a funding limit for a first home not exceeding RM500,000 for
married youth between 25 and 40 years old, with household income not exceeding
RM10,000. The maximum load period is 35 years. Chang feels that under this
scheme where the government will provide monthly financial assistance of RM200
to borrowers for the first two years will help reduce the burden of these young
families just starting out. "I urge the government to impose a restriction that
properties under this Youth Scheme cannot be sold for the first 10 years,
similar to PR1MA properties. Borrowers can also withdraw from their EPF Account
2 to top up their monthly instalment and other related costs. "I urge the youth
to grab this opportunity, offered on a firstcome, first-served basis, for
20,000 units only."
CAUTION: However, Chang advises
young buyers not to forget that the RM200 subsidy is only for the first two
years. "Take heed with regards to Zero Entry Cost properties," says Chang, as
it encourages unnecessary speculation.
Building of more affordable housing
PR1MA to build 80,000
affordable homes with eligibility raised from monthly income of RM8k to RM10k;
National Housing Department (JPN) to build 26,00 units under People's Housing
Programme (PPR) with allocation of RM644 million; Syarikat Perumahan Negara
Berhad (SPNB) to build 12,000 units of Rumah Mesra Rakyat (RMR) and 5,000 units
of Rumah Aspirasi Rakyat on privately-owned land.
CAUTION: "Ensure the right
implementation reaches the appropriate market. Affordable housing must be built
at the right location and priced reasonably between RM150k and RM300k and not
more than RM400k in prime locations. These should only be meant for first-time
home buyers and not second-time house buyers in which PR1MA is allowing with
conditions. The allocated land must also be used to build, and only build
affordable housing, and not partner with private developers where only about
40% of the land (from what we understand from the market) is likely to be
allocated for affordable housing, and the balance used for lifestyle
properties, commercial and highend developments."
SUGGESTION: The
best delivery agents for private affordable housing are private developers,
Chang feels. "The government can boost the delivery of affordable housing if
they give incentives and rebates to private developers to build affordable homes - such as lower corporate tax rates, lower land conversion premiums and/or fast
track release of unsold bumiputra units."
Extension of 50% stamp duty exemption on the
instrument of transfer and loan agreements until December 2016 + increased
purchase limit from RM400,000 to RM500,000
"HBA agrees with the measures to assist the lower- and
mid-income group to acquire their own properties."
CAUTION: "To ensure that benefits
and compensations are not abused, these should only be available for first time
home buyers."
Improvement of the Skim Rumah Pertamaku under
the purview of Cagamas
The government has agreed to raise the ceiling price to
RM500,000 in line with the stamp duty exemption. The age of the borrowers to
qualify for the scheme has also been increased from 35 to 40 years.
SUGGESTION:
Though HBA agrees with the above mentioned measures, it recommends that there
should not be any cap on age limit. "There are many older low and middle income
earners who have yet to own their first property."
States Chang: "The curb measures announced and implemented
for next year's budget [real property gains tax (RPGT) exit costs,
loan-to-value ratio (margin of finance/LTV) and prohibition of DIBS] have
achieved their objectives in partially deterring speculators and 'bogus' house
buyers. It has also brought some sense of orderliness to the housing arena." However, further measures have been prompted by HBA, which it hopes will be
implemented in Budget 2015. These will be discussed in a subsequent feature.
