KUALA LUMPUR: Malaysian real estate stakeholders hope that the government will include additional measures in Budget 2024 to assist developers, support homeowners, and strengthen the middle class, with a focus on housing affordability.
The reinstatement of the Home Ownership Campaign (HOC) is at the top of their priority list.
The HOC was a government initiative designed to assist prospective homebuyers. Simultaneously, it encouraged the sale of unsold properties in Malaysia's housing market.
The campaign, which was run in collaboration with property developers, connected potential buyers with qualifying properties worth RM300,000 to RM2.5 million.
However, the true value for a potential buyer came from the financial incentives provided as part of the scheme. Stamp duty exemption on instruments of transfer and loan agreements for the purchase of residential homes priced between RM300,000 and RM2.5 million (subject to at least a 10 per cent discount provided by the developer) was one of these incentives. Some developers even offered up to 40 per cent discounts for buying their properties.
The exemption on the instrument of transfer was limited to the first RM1 million of the property price, while a full stamp duty exemption was granted on loan agreements signed between June 1, 2020, and December 31, 2021.
With Malaysians' desire for home ownership growing, particularly in popular urban areas, the HOC initiative was created to match aspiring homebuyers with all those vacant homes.
The HOC began on January 1, 2019, and was extended several times before concluding on December 31, 2021.
According to National Property Information Centre (Napic) data, Malaysia's residential overhang at the start of the HOC was 31,661 units.
And according to Juwai IQI co-founder and group chief executive officer Kashif Ansari, the situation has improved, and the latest figures show that HOC has helped families save RM15.8 billion over what they would have paid otherwise for 117,538 HOC homes.
"Total HOC sales added up to RM92.5 billion as of July 2022. By any measure, HOC has been a success and helped more than 100,000 families set themselves on the path to financial independence," Kashif said.
Tan Sri Lim Hock San, executive chairman of LBS Bina Group Bhd, is also hoping that the government will reinstate the HOC.
According to Lim, the HOC's effectiveness from 2019 to 2021 was well documented.
As a result, reintroducing it would boost demand, encourage homeownership, and provide more options and affordability to prospective buyers, he said.
Meanwhile, Kashif hoped that Budget 2024 would include new commitments to help more Malaysians achieve the dream of affordable home ownership.
According to him, when a family is insecure in their home, it suffers from a variety of negative consequences, ranging from lost income to poor educational outcomes for their children.
"To have stable finances, families need four things, reliable income, low expenses, the ability to save for the future, and security in their home. Affordable home ownership helps achieve three out of four of these goals. It reduces and stabilises your monthly expenses, gives you a vehicle for accumulating savings, and guarantees you always have a good roof over your head," he said.
Kashif said the government can also take a more targeted approach, such as providing grants for home buyers, subsidising lower interest rates for members of lower- and middle-income groups, and reducing the taxes and stamp duties buyers must pay when buying or taking out a mortgage.
"One final measure Budget 2023 could pursue is to reduce the cost of new construction," he added.
According to Building Cost Information Services Malaysia (BCISM), which provides cost information to Malaysian construction industry players, Portland cement costs were 50 per cent higher in September than a year ago. Ready-mixed concrete prices have risen by 23 per cent, while sand prices have risen by 18 per cent.
"When prices rise quickly on the materials fundamental to every construction budget, it leads to more costly new homes. When cement and steel bar prices go up, homes become less affordable.
"The government has tools to reduce these input costs. Many materials are either imported or rely on imported ingredients or components. By reducing import levies, Budget 2024 can make housing more affordable," he said.
