House prices in KL City, PJ, JB and Georgetown are most unaffordablein comparison to the household income levels

By IZZAT RATNA / Pic By ISMAIL CHE RUS

Property players hope the upcoming Budget 2018 may offer some incentives or aids to address the mismatch of supply and demand in the affordable home segment.

However, it may not be able to address several other issues or to provide an immediate recovery for the sector, due to severe set-backs as a result of the economic downturn a few years ago.

Mah Sing Group Bhd ED Datuk Steven Ng Poh Seng told The Malaysian Reserve that the affordable home segment has been widely neglected, which led to huge pent-up demand.

“A lot of people are prompting the government for more incentives to encourage more development for the affordable housing bracket — priced at between RM500,000 and RM700,000, depending on the location and the society’s income level within the proximity.

“Therefore, any incentives for this segment would definitely aid in addressing one of the pivotal issues in the property market right now,” he said.

Ng said the issue of end financing, consumers’ income disparity and sharp hike in year-on-year house prices remain as major challenges for home ownership.
Last week, Bank Negara

Malaysia announced that house prices in Kuala Lumpur (KL) City, Petaling Jaya (PJ), Johor Baru (JB) and Georgetown are most unaffordable in comparison to the household income levels.

Data on housing affordability published at www.housingwatch.my showed that the actual median house price in KL City stood at RM580,000, while the maximum affordable house price was RM385,000. On the other hand, the actual median house in PJ is priced at RM470,000, while buyers affordability range for house purchases stood at RM336,000 with a medium monthly income of RM6,484.

As such, Ng said that it is essential for all relevant stakeholders in the property market to educate consumers on the importance of property purchases as a form of long-term investments, which would appreciate in value.

“They need to reduce their short-term commitments, especially in personal and car loans, in order to be in a better financial position for a real-estate commitment,” he said.

UEM Sunrise Bhd MD and CEO Anwar Syahrin Abdul Ajib said Budget 2018 needs to include measures that will ease the people’s burden to own a home.

“We wish for corporate and personal income taxes cut or higher tax rebate or relief, and perhaps some support to the private sector to provide such affordable homes for Malaysians.”

“We also hope that there will be no further curbs or restrictive policies, which would dampen the growth of the property market and the economy in general,” he said.

The Real Estate and Housing Developers’ Association Malaysia president Datuk Seri Fateh Iskandar Mohamed Mansor was recently reported as saying that the upcoming Budget 2018 needs to introduce more flexible schemes for first-time buyers to address the end-financing issue.

The association has also submitted a written proposal to the government on its Budget 2018 wish-list, which highlighted several requests — such as an exemption in the Good and Services Tax on construction materials, leeway in conversion premium, development charges and the infrastructure contribution fund, a 100% stamp duty exemption, and an extension of step-up financing given to 1Malaysia People’s Housing Programme homes to the private sector.

Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abd Rashid said potential house buyers need to maintain a good credit score as it is vital for a house financing application.

“In a way, financial education and the right attitude such as having a financial discipline, ie savings are the key areas that we need to focus on, so that Malaysians can own a house with a peace of mind,” he said.

Mohd Afzanizam said the functioning of the markets may have a greater influence on house prices rather than the transaction cost such as stamp duty, because the demand is still forthcoming despite the prevailing price level.