KUALA LUMPUR – PEPS are asking the government to allow a 100 % loan for first-time buyers of properties priced under RM500,000, as property overhang continues to rise.
Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia (PEPS) said based on National Property Information Centre (NAPIC) data, residential property overhang stood at 32,810 units worth RM19.76 billion in the first half of 2019 (H1 2019).
Houses priced from RM200,001 to RM300,000 formed the bulk of the property overhang, comprising about 22.33 per cent of the total overhang units.
“The overall property overhang status increased to 59,473 units, valued at RM41.732 billion, in H1 2019, a 259 per cent increase from only 16,576 units in 2015,” it said in a statement today.
PEPS also asked the government to allow more funds from Employees Provident Fund (EPF) Account 2 to be withdrawn for the purchase of affordable homes.
“The government should also review and make a clearer Bumiputera quota mechanism, which would release Bumiputera quota of unsold units in order to clear property overhang,” it said.
On the affordable housing issue, the association called for the setting up of a National Centralised Corporation on Affordable Housing, modelled after Singapore’s Housing and Development Board.
Among others, it said, the corporation would plan, coordinate and implement the government’s blueprint and plans on affordable housing nationwide. It would also absorb existing government companies involved in affordable housing such as PR1MA.
PEPS said there was a shortage of affordable housing in the country, attributing it to mismatches in terms of location, pricing and type of housing as well as the slower income growth compared to the increase in housing prices.
“Clear planning guidelines on affordable housing are needed to get all local authorities to gazette local plans and designate areas for affordable housing. With clear planning guidelines, red tape and corruption will be minimised and this will help to reduce house prices,” it said.
PEPS also wants the government to review the real property gains tax (RPGT), announced in Budget 2019 with the aim of preventing speculation and controlling housing prices.
“In view of the lacklustre property market and high oversupply, this revision of RPGT rates had a negative impact on the property market and had become a burden to the investors,” it said.
In Budget 2019, the government had announced RPGT rate increase from zero per cent to five per cent for individual disposal of property and a doubling to 10 per cent for company and non-citizens.
With the Budget 2020 happening this Friday at 3 PM, what are your thoughts on this latest update for first-time homebuyers? Do you have any concerns or opinions? Let’s discuss!