The National House Buyers Association (HBA) acknowledges the challenges faced by our Honourable Finance Minister in tabling BUDGET, 2022 from the Government on Friday, 29th October, 2021 in view of the COVID-19 pandemic affecting the global and regional economies as well as the financial health of Malaysia.
Our comments and response to Budget 2022 on matters relating to the property sector only are as follows:
1: Allocation of RM1.5 billion to build Affordable Properties
HBA welcomes the announcement that the Government will allocate up to RM1.5 billion to build comfortable and quality homes for the lower-income segment. This is a noble aspiration by the Government to ensure that every Rakyat including the lower-income segment has access to comfortable and quality housing.
HBA hopes that proper planning, allocation, distribution and execution is done to ensure that these Affordable Properties are built for the targeted groups with the following caution from us, inter-alia:
*Scores of low and medium housing and more recently affordable housing project schemes being built
In the past five decades, scores of low and medium housing and more recently affordable housing project schemes and funding plans have been introduced in Malaysia. Information on low, medium and affordable cost projects: those under construction or planned by the various government or private housing providers, state economic agencies, federal bodies and funding schemes, should be made available to the public domain in a common database. This will allow individuals to learn about the availability of those low, medium and affordable categories in their communities and the financing options available.
*Single ‘umbrella’ to coordinate distribution and availability
It seems that the local councils and land offices have their own respective directives from their State Government to impose mandatory ‘low, medium and affordable costs’ housing categories. Have they have been overzealous in carrying out the directives? Has anyone made a last count of the numbers of low-cost units that are available in the market but unsold? Has there been an overhang of such properties?
Why isn’t there a ‘single umbrella’ or ‘data bank by the federal government where information can be collected to coordinate the total numbers of such units being built, the location and pricing? With a click of a button, one must be able to get the information that her/ she requires: information of types, makes, location and price of the available units of house/ stratified properties. Example: With a click of a button, potential buyers should be able to find their dream single storey measuring 22’ x 70’ terrace, priced at approx. RM180,000 at Ulu Yam, Selangor. The Government or the related Ministry should set up a data bank on housing projects.
At HBA we have an adage: “They must build the right product at the right place with the right pricing and the right numbers”.
The government agencies cannot possibly built an apartment block in a place where there is only demand for landed property or built houses. Or build where there is practically no demand and which will just add to the statistics of ‘overhang’ (built and unsold) properties.
*Affordable Properties must fulfil the following criteria
1) Price – below RM300,000
2) Size – Minimum build-up of 900 sq feet excluding balcony
3) Location – near public amenities such as rail transportation (MRT/LRT) and other public amenities such as schools, hospitals, etc.
2: Allocation of up to RM2.0 billion for Housing Credit Guarantee Scheme for employees without stable income
HBA welcomes the announcement that the Government will allocate up to RM2.0 billion for Housing Credit Guarantee Scheme to guarantee Housing Loans to help those without a stable income such as in the Gig Economy to buy properties. The Gig Economy has been a lifesaver to many of the Rakyat who lost their jobs and resorted to becoming e-hailing drivers, food delivery riders and other forms of freelance work.
These employees are still economically productive and as such, should have access to financing to buy assets such as property. However, their income may not be consistent and many lack the full documents that Banks typically require from fixed income salaried employees.
This Guarantee Scheme would be very beneficial to the employees in the Gig Economy to buy their own property. However, HBA hopes that this Housing Credit Guarantee Scheme will be limited to First Time House Buyers and only for Affordable Properties
3: Abolishment of RPGT for properties held for more than 6-years
HBA welcomes the proposal to abolish RPGT for the sale of properties held for more than 6-years. HBA had in the past urged the Government to abolish RPGT for properties held for more than 6-years as RPGT meant to be an anti-speculative tax and property held for more than 6-years would not be deemed as speculative investments but mid to long term investments. Syabas & Tahniah
4: General Economy
Budget 2022 also announced the continued reduction in the employee contribution for the Employees Provident Fund (EPF) from 11% to 9% up to 30 June 2022. This move is expected to increase the disposable income of the Rakyat and is hoped that it will indirectly help to stimulate the local economy.
Although HBA supports moves to increase the disposable income of the Rakyat, HBA hopes that employees will have the option to maintain the contribution at 11% if they so wish to as the dividends from EPF is still much higher than the current fixed deposit rates offered by Banks. Contributors of EPF must be mindful that the monies in EPF should always be intended to be used as retirement funds and not to splurge on unnecessary things.
This article was written by Datuk Chang Kim Loong, Hon. Sec-Gen of the National House Buyer’s Association (HBA).