The Government acknowledges that comfortable and affordable housing is the most important basic necessity for the rakyat. The Government is committed in ensuring that the rakyat has the opportunity to own a house. This is not only an economic imperative, but also a moral imperative for a responsible Government. Therefore, the Government will make affordable housing a continuous priority. I am happy to announce that the Government will allocate RM1.9 billion to build 123,000 affordable housing units in strategic locations in 2013. The initiative will be implemented by PR1MA, Syarikat Perumahan Nasional Berhad (SPNB) and Jabatan Perumahan Negara.

A total of RM500 million will be spent by PR1MA to build 80,000 houses in major locations nationwide with the selling price ranging between RM100,000 and RM400,000 per unit. Among the locations are Kuala Lumpur, Shah Alam, Johor Bahru, Seremban and Kuantan.

In addition, PR1MA will provide the Housing Facilitation Fund totalling RM500 million to build houses in collaboration with private housing developers. The house prices under this programme will be 20% lower than the market price and distributed through an open balloting system.

Meanwhile RM320 million will be allocated through SPNB to build 22,855 residential units including low and medium-cost apartments, Rumah Mesra Rakyat and Rumah Mampu Milik. SPNB’s housing projects, which will be implemented immediately, include the construction of 1,855 medium-cost apartment units with a built-up area of 850 square feet in Shah Alam and Sungai Buloh. These units will be sold at about RM120,000 to RM220,000 per unit.

With regard to Rumah Mesra Rakyat programme, SPNB will build a total of 21,000 houses in 2013. Under this programme, SPNB will construct houses priced at RM65,000 per unit with a subsidy of RM20,000 as well as a 2% subsidy on interest rate.

In addition, a sum of RM543 million will be provided to Jabatan Perumahan Negara for the implementation of 45 projects under the Rakyat Housing Programme (PPR) involving 20,454 units which will be constructed through the Industrialised Building System (IBS). These units of houses will be sold at a price between RM30,000 and RM40,000 per unit, much lower than the market price of about RM120,000 per unit. The Government will also allocate 20% of the PPR houses to public sector employees and 1% to the disabled.

To enable more Malaysian own their first residential property, My First Home Scheme, which was launched under the previous Budget, will be improved by increasing the income limit for individual loans from RM3,000 to RM5,000 per month or joint loans of husband and wife of up to RM10,000 per month. In addition, the requirement for a savings record equivalent to three months instalment and minimum employment of six months will be abolished.

In the 2009 Budget, the Government had given a 50% stamp duty exemption on the instrument of transfer agreements and loan agreements for the purchase of the first residential property of up to RM350,000. The Government proposes that the stamp duty exemption is extended to 31 December 2014 with the price limit on residential properties raised to RM400,000.

Revision of Real Property Gain Tax

The limited supply of real property especially in urban areas has provided opportunities for speculative activities. Therefore, the Government proposes the real property gains tax (RPGT) from the disposal of properties made within a period not exceeding 2 years from the date of purchase will be taxed at the rate of 15% and 10% for disposal of property within a period of 2 to 5 years. For property disposed after 5 years from the date of acquisition, RPGT is not applicable. In addition, gains from the disposal of one residential property once in a lifetime and disposal of properties based on love and affection between husband and wife, parents and children, grandparents and grandchildren are exempted from RPGT.

Tax Incentive for Revival of Abandoned Housing Projects

Furthermore, in 2013 the Government will allocate RM100 million to the Ministry of Housing and Local Government to revive 30 abandoned housing projects. In addition, to encourage the involvement of the private sector, the Government will provide tax incentives as follows:

First: Banking institutions be given tax exemption on interest income received from the rescuing contractor/developer;

Second: Rescuing developer be given a double deduction on interest paid and all direct costs incurred in obtaining loans;

Third: Rescuing contractor be given stamp duty exemption on all instruments executed for the purpose of transfer of land or houses and loan agreements to finance the cost of revival; and

Fourth: Original house buyer in the abandoned project be given stamp duty exemption on all instruments executed for the purpose of obtaining additional finance and the transfer of the house.

Source: The Star

SOME analysts have already downgraded the property sector amid speculations that Budget 2013 will implement tough measures on the industry.

Soaring property prices are on most people’s minds but any steps taken to counter this may not be positively viewed by industry players. Yet, public outcry has been loud and clear – affordable living tops the rakyat’s budget wish list .

As a listening Government, I expect that they will include strategies to address this issue in Budget 2013. At the same time, the Government will need to make sure that the Malaysian property market remains robust and attractive, to both local and foreign investors.

In managing this, the Government should take a two-pronged approach – giving incentives and support to increase affordability, and curbing spiralling property prices.

Increasing affordability

Expectations are high as to how the Government will deal with this issue. It launched the PR1MA project to provide affordable housing to first-time homebuyers, but critics say that the loan approval process has been slow and there has been a large number of rejections due to stringent lending requirements. The eligibility criteria should be reviewed – with lower interest rates and the loan repayment period extended.

It is still early in the game to evaluate the success of PR1MA as its first property launch happened only in November last year. But I firmly believe that it is a step in the right direction and the Government should continue pressing on – allocating more land and accelerating project launches, particularly in the Klang Valley, Penang island and Johor Baru, which are the areas worst hit by high property prices. The Government also recently announced its plan to build 50,000 units in Kuala Lumpur alone in 2013, which is another piece of good news.

But the current requirement for private developers to build low-cost homes may not yield its full benefits as this is obviously not their focus. Instead, each state could set up a trust fund or foundation, which developers can choose to contribute to. The fund would then coordinate the construction, allocation and maintenance of affordable housing.

For other first-time homebuyers, the Government could introduce a tax relief on interest expenses incurred to buy residential properties. Such a move wouldn’t be new as it was introduced during the 2009 economic stimulus package to address the dampening property market then.

Also, while full stamp duty exemption has been given to property bought under the PR1MA scheme, property in the medium price range should not be forgotten. The current 50% stamp duty exemption for properties valued RM350,000 and below will expire this year.

I hope the Government will extend the exemption period, and increase it to a 100% exemption moving forward. In addition, looking at the prevailing market prices, the threshold should be increased to at least RM500,000.

Managing property prices

There is a strong sentiment that property prices are soaring beyond what’s affordable. But if we compare ourselves to neighbouring countries, our residential property prices aren’t all that bad. Except, perhaps, in some urban areas like the Klang Valley and Penang island.

To curb property prices, Bank Negara has tightened measures – a 30% loan-to-value ratio for third mortgages onwards is required, and loan affordability is now based on net income instead of gross income. These measures have yielded some positive results, but may not be enough.

Stamp duty on property acquisition can be used as a tool. Singapore, for example, recently introduced additional buyer stamp duty (ABSD) of up to 10% for foreign buyers and 3% for subsequent property purchases by Singapore citizens and permanent residents. The ABSD is imposed on top of the normal stamp duty rates. Our Government could consider adopting this.

Real property gains tax (RPGT) is also a good way of managing property prices. There’s been talk that the Government may reintroduce RPGT in its original form i.e. with a tax band of 30% to 5% for corporates, and 30% to 0% for Malaysian residents. (see figure 1) The current RPGT regime was brought back in 2010, following the revocation of full RPGT exemption since April 1, 2007.

The existing RPGT rate of 10% is rather mild in addressing the speculative nature of the property industry so a rate of 30% would have greater impact. The existing three-tier low RPGT rates are not effective as properties generally take two to three years to complete development. By that time, the rate would have dropped to 5%.

While these are all good measures to counter property prices, we need to be careful that any move to increase affordability could also dampen market sentiment. This could have adverse effects on the property market’s growth.

In fact, the property market has already started to show signs of cooling with home loan approval rate dipping in the first half of 2012. Despite the recent Asia Property Market Sentiment Report 2012, which revealed that Malaysians continue to be upbeat about the property market, we need to be mindful of the current economic calamity facing the world which may soon hit our shores. The softening market demand, both locally and abroad, coupled with counter measures could severely impact the property industry.

With elections looming round the corner, any aggressive counter measures are unlikely. Nonetheless, the Government should seriously consider RPGT as a long term strategy for managing the speculative nature of the industry.

It’s fairly certain that the property sector will be one of the priority areas for Budget 2013. The rakyat will invariably expect some goodies to be handed to them. And property players will have to keep their fingers crossed that any measures taken should not significantly dampen market sentiments and property demand.

Source: The Star

Seri Delima Residences, strategically located within Juru township in Penang, a mere minutes drive from North-South Highway Interchange and Juru Auto-City. Featuring 200 apartment units with 24-hour security, access card system and swimming pool.

The details of this project will be updated soon.

Property Project : Seri Delima Residences
Location : Juru, Penang
Property Type : Apartment/Condominium
Total Units :
Built-up Area:
Land Tenure: Freehold
Indicative Price:
Developer: 
Developer Contact:

Location Map:

GEORGE TOWN: A group of shop owners of Prangin Mall are crying foul over the developer’s failure to issue them with strata titles over the past 12 years.

Prangin Mall Joint Body Management chairperson Terri Yeoh Mooi Sim said the shop owners had suffered great losses as the market value for the 611 shoplots at the mall were all devalued.

“The developer Gerak Unggul Sdn Bhd did not apply for the strata titles from the land office under the Strata Titles Act 1985.”

She added that under the Act, the developer has to apply for the strata titles within six months of the certificate of fitness being issued.

“Without strata titles, we are facing a lot of problems. For example, an owner who bought a unit for RM200,000 in 2000, can only sell the unit for RM80,000 according to market prices three months ago.”

Yeoh was speaking to reporters at a press conference held at the mall in Jalan Lim Chwee Leong here yesterday.

Komtar assemblyman Ng Wei Aik, who was also present, said that the problem started when Prangin Mall land was sold to a company in 1994.

“But the Lebuh Lintang stretch leading to Jalan Lim Chwee Leong in between the mall was not sold so this means the road still belongs to the state government.

“The mall technically ‘belongs’ to two owners, and this is the reason why the strata titles cannot be issued to the shop owners,” he said.

Prangin Mall opened for business in 2001.

Source: The Star

PETALING JAYA: Exorbitantly high selling prices, stringent banking rules and a generally cautious sentiment that has been having an impact on the Malaysian property market this year could continue into 2013.

Malaysian Institute of Estate Agents (MIEA) deputy president Siva Shanker said property transactions in the first half of 2012 had slowed down, adding that this trend showed no signs of abating any time soon.

“Asking prices are too high. The buying frenzy is over. In 2010 and 2011, some residential sectors saw an increase of about 30%, which is way too high and moving towards a bubble. This trend has somewhat plateaued.

“What’s happening now is there is no meeting of minds between the asking and the accepting price. The gap is just too wide and there are fewer transactions taking place,” he told StarBiz.

Siva also said transactions had been affected because there was a disparity between the asking price of the property and the actual price listed on the valuation report.

“For example, the asking price of a property is RM1mil but the valuation amount might only be RM800,000. There’s a shortfall of RM200,000 and banks lend you money based on either the selling price or the valuation price whichever is the lower.

“So if the valuation price is RM800,000 and you’re eligible for a 70% loan based on that amount, you get a sum of around RM560,000. This means the buyer is going to have to top up RM460,000 on his own!

“Funding becomes a problem and the sale gets aborted!”

Siva said a number of sales this year had been aborted because of this issue.

“We don’t think 2013 is going to be much different, but we don’t see the Malaysian property market crashing and burning like during the US subprime crisis.

“What we see is things slowing down, prices will stagnate a bit and not move up so much. In some cases, it won’t move up at all.”

Siva said Bank Negara’s responsible lending guidelines that were implemented this year also had an impact on the Malaysian property market.

Effective Jan 1, banks have been using net income instead of gross income to calculate the debt service ratio for loans. This is said to be a pre-emptive move by the central bank to contain the rise in consumer debt.

“Prudent lending guidelines are important in maintaining a stable economy, but I think some flexibility must be allowed for individual purchasers that have the capacity to repay their loan, but for whatever reasons, are unable to show that they can,” said Siva.

He also noted that there were many individuals having side incomes which were not declared.

“You could be a teacher earning a RM3,000 salary. However, you could be providing tuition classes on the side to earn extra income but can only show to the bank the salary that you earn.

“Prudent lending should involve assessing the customer, to some extent, on an individual basis. If he’s an old customer with a good track record, you should have the discretion to offer him a little bit more. That discretion is now not available because of the lending guidelines.”

Siva also said the Malaysian public was cautious in light of the global economic uncertainties.

“The general slowdown has affected everyone. The US is not recovering as well as it should and Europe is in turmoil. However, in a sense we’re not so exposed as Singapore, because we are more inward looking. Singapore is a bit more international, so their exposure is higher.”

“It’s also sentiment. People are adopting a wait and see approach, and this creates a slowdown. If enough people do this, it creates a market!”

Source: The Star