NEW STRAITS TIMES. 16TH MARCH: Property stakeholders are encouraging the new unity government to restore the house ownership campaign (HOC), citing the lack of catalysts for the property market in the amended Budget 2023, which was tabled last month.
Under the HOC scheme, first-time homebuyers benefit from full stamp duty exemptions for residential properties up to RM1 million and partial stamp duty exemptions for those priced between RM1 million and RM2.5 million.
In addition, every homebuyer received a 10 per cent reduction on the purchase price of the property.
Glomac Bhd group managing director and CEO Datuk Seri FD Iskandar Mansor said that the HOC is critical to driving property sales in the country.
He also wants the government to improve Malaysia My Second House (MM2H) initiative, which is expected to fuel Malaysia’s real estate market this year.
“The government should focus on a more consistent and aggressive MM2H initiative to attract more international investors,” he said during the recent Malaysian Housing and Property Summit titled Reimagining Development in the Post Pandemic Era.
According to FD Iskandar, the real estate market has been fraught with difficulties, particularly since 2016, when property values have been relatively stagnant.
“We have been faced with a lot of challenges during that time. These last two years we have been facing the pandemic. Even though now we are in the endemic phase, we are still faced with a lot of challenges, especially in terms of building materials,” he said.
He cited Rehda Malayaia’s recent Property Industry Study 2H 2022 where property developers stated that the cost of doing business had gone up by an average of 13 per cent to 17 per cent in different states.
Another difficulty, according to him, is the facilities that developers must cede in their development projects.
“(Previously) when you buy a 100-acre plot of land, you can develop 60 per cent of it right away. Then, about 2010, it dropped to 50 per cent. Currently, property developers’ net saleable area is less than 45 per cent since they must give land to establish schools, community centres, places of worship, clinics, and hospitals. We had previously been requested to give up land. We now know that we are supposed to construct these schools, houses of worship, and facilities such as community centre. All of them are expenses for developers.
“As much as we would like to see development, each year there are so many toll gates imposed on developers in order to truly meet the social demands that are supposed to be the government’s responsibility. We are not going to run away from our responsibilities, but there must be a limit. When it comes to Bumi quotas, we have accepted 30 per cent, but if you go above that because this is cross-subsidy, you are charging the other 50-70 per cent who do not receive these subsidies,” he said.
FD Iskandar hoped that the government will do more to help the local real estate sector.
He emphasised that, in addition to greater business costs and rising building material prices, other issues influencing the property market include delays in obtaining approvals.
“Getting approvals takes about 24 months to 36 months after the pandemic. Imagine how much money or interest you have to pay. At the same time, we are being asked to make properties more affordable. How can we make properties more affordable when the process of getting approvals is getting longer? There is a minimum of 22 to 23 agencies involved just to get the approvals.
“Another issue is end-financing. According to Rehda’s Property Industry Study 2H 2022, 86 per cent of respondents had financing issues, particularly for their buyers. The top three reasons for end-funding rejections were discovered to be ineligibility owing to buyer’s income, purchasers being provided lower margins of financing by banks, and a buyer’s unfavourable credit history.”
“The government must take action in this regard,” he said.