BY NURUL ASMUI MD AZMI
asmui@propwall.com
(From left) Chew, Kho, Yeo, Towle, Ho, Chong and Toh.
Participants at the roundtable focused their discussion on the challenges of the property market.
ON Sept 1, StarProperty.my had organised a roundtable discussion on "Overcoming Malaysia’s Property Industry Challenges at Budget 2017" at Menara Star, Petaling Jaya. Six real estate experts attended the seminar to discuss and contribute their opinions on the property market issues that matter.
The participants included Malaysia Institute of Estate Agents (MIEA) president Erick Kho, Rehda Penang chairman Datuk Toh Chin Leong, Ekovest Bhd project director Christopher Yeo, IJM Land Bhd managing director Edward Chong, IWajib Property director Datuk Chew Yin Keen and Mah Sing Group chief executive officer cum executive director Ho Hon Sang.
Moderated by StarProperty Sdn Bhd acting assistant general manager Ernest Towle, the roundtable discussion kicked off with the main question, “What are the financing challenges and how should they be addressed in the upcoming Budget 2017?”
All of them at the roundtable discussion agree that many homebuyers, especially first timers, are struggling to buy a house due to so many factors. One of the major challenges that most of the homebuyers are facing is end-financing and loan rejection.
According to Erick, household debt has gone up tremendously. Therefore, it is currently a very challenging time to purchase a property.
“I am aware that for the primary market, there are a great deal of loan rejections. The official loan rejection rate disclosed by the Bank Negara is at 60%. Government should look into various areas to solve this issue as there are still many purchasers out there that are determined to buy, but they are unable to get financing.
Chew stated that there are three main components that can help reduce cost of borrowings so that homebuyers can finance their property purchase.
“First, in order to increase the ability to borrow, the interest rate on housing loans must be decreased. A special rate that is equivalent to or less than the Overnight Policy Rate (OPR) rate could possibly be considered as it will inevitably improve the debt service ratio (DSR).
“Second, the charge of stamp duty on memorandum of transfers (MOT) and loan documentation should be exempted to reduce the cost of acquisition. This will, thus, increase the ability to purchase.
“Third, GST relief should be granted by the government to reduce to cost of house. When the cost of GST is relieved from all of the items that are used to build houses, the price of the house will decrease. Therefore, the group of people who have the ability to secure housing loans will increase,” explained Chew.
Meanwhile, Ho confirmed that increased loan ratios will allow more people to purchase.
“Restriction on the financing provided by banks has made it hard for many people to obtain loans to buy a property. Necessary steps must be taken to improve the situation. If not, the property industry will suffer,” said Ho.
“If loan ratio is increased, it will be easier for homebuyers to buy and the margin will also be better. Homebuyers no longer have to come up with a lot of cash to buy a property,” he added.
Amongst the other issues that have been discussed at the roundtable were property-related regulations, comparison between primary and secondary market, affordable houses, and how government should step in to help the property industry.
The StarProperty.my roundtable has received excellent feedbacks and useful responses from the line of property experts. This affirmed the effort of StarProperty.my to provide a platform to combine a range of perceptions and ideas on how to solve the issues in the property market.
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