The Malaysian Institute of Estate Agents (MIEA) is disappointed with Budget 2015, as the measures announced are too small to have an impact on the property market, said its president Siva Shanker.

“I am disappointed with the announcement. The budget during the last two to three years only managed to reduce transactions. More should have been done…the measures are too small to have an impact on the market. Thus it will be business as usual and prices will continue to increase,” he told SunBiz.

Siva said one of the issues that the government did not address in the budget was investor clubs, which has distorted and damaged the property market badly.

He said there will be further pressure on the market when those who bought via investor clubs to “flip” the property at a higher price try to sell the units in a market where buyers cannot afford.

However, Siva lauded the government’s move in helping the youth and first-time house buyers with the Youth Housing Scheme, more units to be built under 1Malaysia People’s Housing Programme (PR1MA) and extension of the 50% stamp duty exemption.

The government extended the 50% stamp duty exemption on instruments of transfer and loan agreements and increased the purchase limit from RM400,000 to RM500,000. This exemption will be given until Dec 31, 2016.

“I think the stamp duty exemption is a great idea but there must be a mechanism in place to make sure the buyers are really first-time home buyers,” he said.

Siva said the exemption should be made available only for first-time property buyers to avoid abuses. For example, a person who has bought five commercial properties but yet to buy his first home, although it is unlikely, should not be eligible for the exemption.

“It should be limited to those buying their first property and first home, for own occupation,” he added.

On the Youth Housing Scheme, which is a smart partnership between the government, Bank Simpanan Nasional, Employees Provident Fund and Cagamas, Siva said it is a good move but the 20,000 units available is too little.

“I’m sure there are more than 20,000 married youths who have yet to buy their first home. They should increase the amount,” Siva said.

The government also announced an allocation of RM1.3 billion to build 80,000 units under PR1MA and raised the ceiling of household income from RM8,000 to RM10,000. A Rent-To-Own scheme will also be introduced for individuals who are unable to obtain bank financing.

“This is a good move but 80,000 is not enough. My worry is the implementation, that people who don’t need it will buy it. There must be a fool-proof system to avoid abuse. Enforcement and vetting process must be thorough, to reserve it for those who really need it,” he said.

Meanwhile, Zerin Properties CEO Previndran Singhe said overall, the budget is positive for the property market as it includes affordable housing and infrastructure.

“Infrastructure investments such as LRT 3 will be fantastic for Shah Alam and Klang while the Second MRT Line from Selayang to Putrajaya will be good for Putrajaya estates. Prices in the area will increase. Affordable housing measures are commendable and the income tax reduction in conjunction with the goods and services tax (GST) coming in is also good,” he said.

“We would have liked to see more stimuli for the primary market but overall the measures are good,” he said.

However, he cautioned that house prices will still increase as residential properties are still classified as exempt under the GST, which means developers are not entitled to any refund on their input tax.

“House prices will still go up because there is no way the developers can absorb it,” he added.

Source: The Sun Daily

Youth Housing Scheme

A new scheme, Youth Housing Scheme, to be introduced with smart partnership between the Government, Bank Simpanan Nasional, Employees Provident Fund and Cagamas:

• A funding limit for a first home not exceeding RM500,000 for married youth aged between 25 and 40 years with household income not exceeding RM10,000. The maximum loan period is 35 years.
• The Government will provide monthly financial assistance of RM200 to borrowers for the first two years to reduce the burden of monthly installments. The Government will also give a 50% stamp duty exemption on the instrument of transfer agreements and loan agreements.
• The Government will also provide a 10% loan guarantee to enable borrowers to obtain full financing including cost of insurance. Borrowers can also withdraw from EPF Account 2 to top up their monthly installment and other related costs.
• However, this is only offered to the first 20,000 eligible youth on a ‘first come first served basis.

Affordable Housing Scheme

Affordable Housing Scheme to be continue with the following improvement:

• 80,000 units to be built under the 1Malaysia People’s Housing Programme (PR1MA) with an allocation of RM1.3 billion.
• The ceiling of household income is raised from RM8,000 to RM10,000.
• Rent-To-Own Scheme will be introduced specifically for individuals who are unable to obtain bank financing;
• 26,000 units to be built under People’s Housing Programme (PPR) by National Housing Department (JPN) with an allocation of RM644 million.
• A total of 37,000 affordable units to be built under Rumah Mesra Rakyat (RMR), Rumah Idaman Rakyat & Rumah Aspirasi Rakyat programme by Syarikat Perumahan Negara Berhad (SPNB).

My First Home Scheme

The scheme to be improved by raising the ceiling price to RM500,000 in line with the stamp duty exemption. In addition, the age of borrowers to qualify for the scheme will be increased from 35 to 40 years.

Public Housing Maintenance

RM40 million will be allocated under the Public Housing Maintenance Programme. While another RM100 million will also be allocated under the 1Malaysia Maintenance Fund for maintenance of private low-cost housing.

Tax and Stamp Duty

To enable more people to own their first home and reduce the cost of buying a house, the Government has agreed to extend the 50% stamp duty exemption on instruments of transfer and loan agreements and increase the purchase limit from RM400,000 to RM500,000. The exemption will be given until 31 December 2016.

It is proposed that tax on gains from the disposal of property be self-assessed by the taxpayer effective from the year 2016.

Source: The Star Online

It is widely acknowledged that property price in the Klang Valley, Penang, and Johor are much higher compared to other places.

As property prices in Malaysia’s urban centres keep spiralling up, the country’s House Buyers Association (HBA) urged the government to raise the cap for affordable housing to RM400,000 in its Budget 2015 today.

With places like the national capital and other urban centres like Penang, Johor Baru and the Iskandar region in Johor attracting more workers, the HBA said the current price cap of RM170,000 for medium-cost homes was just too low to count as realistic prices under the government’s definition of affordable housing.

“To reach a greater market segment, HBA recommends that the government increase the price limit for medium-cost housing to RM400,000 in order to capture a larger segment of the rakyat which comprises the low and middle-income segment,” HBA honorary secretary-general Chang Kim Loong told Malay Mail Online this week.

He noted that the government budget last year gave incentives of RM30,000 for each medium-cost and low-cost house built by developers, with the price of low-cost houses capped at RM45,000.

“Additional incentives that can be given to developers to build affordable housing are [to] fast-track approval, lower conversion premiums and fast-track approval for unsold Bumi quota units,” said Chang.

He noted that property prices in the Klang Valley have been rising annually between 12 and 15 per cent for the past five to eight years, which he said was unaffordable for young people.

“An ideal range would be between, say 6 per cent to 8 per cent, which is higher than inflation but can allow annual increase in salaries and wages to catch up,” he said.

For Budget 2015, HBA also called for the 7 per cent Bumiputera discount to be limited to private residential properties costing RM500,000 and below, as well as to limit the discount to a maximum of two properties for a single buyer.

“This price cap can be further fine-tuned from state to state and urban and rural areas as it is widely acknowledged that properties in the Klang Valley, Penang, and Johor are much higher,” Chang said.

“The type of property should exclude luxury homes such as bungalow homes, semi-detached homes and penthouse condominiums or apartments. This would mean that only link-homes and condominiums or apartments, which cater to the masses and less affluent buyers will be eligible for the Bumiputera discount and ensure that the Bumiputera discount reaches the right target market,” he added.

He also said commercial properties should be excluded from Bumiputera discounts, noting that other government agencies like the Council of Trust for Indigenous People (MARA) and the Malaysian Investment Development Authority (MIDA) were better equipped to assist Bumiputera entrepreneurs.

HBA further urged Putrajaya to double the floor price for properties in the Klang Valley and its growing satellite towns of Kajang and Semenyih that foreigners can now buy from RM1 million to RM2 million.

The group also asked for the same to be imposed on properties in the land-strapped northern state of Penang as well as to cities to the country’s south, namely Johor Baru and the Iskandar region near Singapore, the latter which is drawing expatriates looking for cheaper alternatives to homes in the island republic.

“Foreigners must be prevented from buying up property meant for the middle-income rakyat. This is especially true for development corridors such as Iskandar Development which has seen foreign purchasers arriving in droves and sweeping up properties with their superior exchange rate,” said Chang.

HBA’s wishlist for Budget 2015 also includes increasing the stamp duty for the third and subsequent properties bought, to help curb property speculation.

Chang said the stamp duty for a single buyer on his third property should be set at a flat rate of 5 per cent of the property value, 7.5 per cent for the fourth property and 10 per cent for the fifth and subsequent property.

“HBA’s proposal will not penalise the majority of the rakyat who can only afford to buy two properties,” he said.

Source: The Malay Mail Online

Those buying homes under the 1Malaysia People Housing Programme (PR1MA) will save money in a scheme to be introduced under Budget 2015.

The scheme, expected to be an­nounced with the Budget tomorrow, will see the Government “subsidising” a portion of the interest rate for the home loans.

Details of the scheme are still being worked out but it will provide some form of financial relief for the buyers, according to sources.

“Based on previous schemes for affordable homes, the Government subsidises up to 2% of the interest incurred and is subject to a minimum rate. There could be a similar incentive for this scheme.

“This is to make it easier for the housebuyers to get approval for the loans and to minimise their hardship in the event of a hike in interest rates,” said one source.

Housing loans now range between 4.39% and 5.85% based on the base lending rate (BLR) of 6.85%.

More than 700,000 Malaysians have expressed interest in PR1MA, with 500,000 affordable homes to be rolled out by 2018 under the Government initiative.

In the Klang Valley, a PR1MA home would be priced between RM350,000 and RM400,000, with prices in a lesser urban area starting from RM100,000.

Introduced in 2011, the programme targets urban areas where an individual or a family earns a combined household income of RM2,500 to RM7,500 monthly.

The scheme is likely part of the rent-to-own (RTO) scheme for prospective house buyers unable to secure housing loans from financial institutions, that was announced last month.

This will enable these Malaysians to each own a house by paying rent on the property for 20 to 30 years, towards eventually owning it.

PR1MA is working with several banks to offer the RTO scheme.

PR1MA from launch till now

Perbadanan PR1MA Malaysia declined to confirm the scheme but said that it was developing several financial packages.

“An announcement will be made in due course,” the company said in an e-mailed statement.

Many housing industry players praised the plan to give middle-income Malaysians a helping hand with owning a home.

“Housing affordability tops the list of public concerns, more so in urban areas in the Klang Valley,” said one player who declined to be named.

But some were skeptical that it would be helpful to the intended group.

“For a RM400,000 house, the buyer has to fork out at least RM40,000 for the downpayment and the monthly payment will range from RM2,000 to RM2,400 for a 30-year loan period.

“This can eat up a substantial portion of the buyer’s household income, more so with the recent price hikes,” said another industry player who also requested anonymity.

Several potential housebuyers were also skeptical and were worried that the quality of the houses would not be up to the mark.

Others were deterred by the condition that PR1MA house owners cannot sell off the property for at least 10 years.

Source: StarProperty.my

Trehaus, a countryside luxury development at Bukit Jambul Indah by IJM Land, comprises limited units of Condo Villas and Semi-Detached Villas.  Perched on elevated ground and embraced by lush greenery, from the Tréhaus you can indulge in the exclusive feeling of having the world literally at your feet.

Property Project : Trehaus
Location : Bukit Jambul, Penang
Property Type : Condominium & Semi-Detached Villas
Total Units : 46 (Condo), 26 (Semi-Detached)
Indicative Price: RM1,400,000 onward
Developer : IJM Land

* This project was first posted in July 2012 *

Location Map:

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