Budget 2018 Wishlist: Helping Future Homeowners

Despite Malaysia’s property market stabilising in 2017 as consumer sentiments improve and prices showing a gradual uptrend, unaffordability remains at the heart of the matter, which continues to impact Malaysians in a profound way.

83% believe that properties are overpriced, 46% feels that interest rates are too high, while 43% mentioned dipping into their Employee Provident Fund (EPF) savings to purchase property (5% increase from last year), and 69% expressed concern over the economy.

In addressing these and other concerns towards the ultimate aim of promoting home affordability and ownership, PropertyGuru Malaysia proposes the following for inclusion in Budget 2018:

  1. Updated guideline/definition for affordable property

    Sheldon Fernandez, Country Manager PropertyGuru Malaysia

A clearer reference point is needed to support plans for new housing supply, especially in key urban areas such as the city centre. The definition should include the price, unit size, location, private sector feedback and other considerations.

  1. Increased plot ratios

This will allow developers to build more units, optimising land use and space. It will reduce the individual cost of each unit, resulting in more affordable homes. Transit Oriented Developments (TOD) should especially be allowed to have increased plot ratios. This will promote home ownership and public transport ridership to reduce traffic congestion.

  1. Revision to Gross Income to Assess Loan Eligibility

By doing this, market transactions will increase significantly. It can also be restricted to special groups of buyers, such as first-time homeowners only.

  1. Relooking interest rates

PropertyGuru recommends a reduction of 0.5-1.0% of interest rates for first-time homeowners buying affordable properties and offer them a special interest rate if they bought affordable properties within a specific price range in transit oriented developments (TOD).

  1. Landlord incentives

In focusing on home ownership, there is a need to focus on short-term solutions, providing more rental housing for Malaysians who cannot afford to buy. PropertyGuru recommends special incentives provided to homeowners who rent to Malaysians on a longer term basis.

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