Property stakeholders hope for measures that promote homeownership
Contributed by Sulaiman Saheh
As we enter October, much discussion surrounds the upcoming Budget 2025, with the hope that it will sustain the recent growth momentum. In a landscape of rising living costs and increasing demand for affordable housing, various stakeholders in the property sector are seeking targeted measures to promote homeownership, enhance property accessibility and stimulate further market growth. Homebuyers are particularly interested in what new or returning incentives may help them pursue their dream home amidst tight spending and cautious sentiment.
In addressing housing affordability, it is expected that the government will continue and enhance existing programs like the PR1MA Housing Programme, Projek Perumahan Rakyat (PPR) and Syarikat Perumahan Negara Bhd (SPNB) housing initiatives. While raising income levels, particularly disposable income, is essential, improving access to homeownership - whether for landed homes or high-rise condominiums, apartments, or serviced apartments - requires reducing barriers to entry. The focus on the B40 and M40 groups should continue, with particular attention to the M40, who are at risk of becoming the urban poor.
Prices and entry barriers could be lowered through special programs such as the Home Ownership Campaigns (HOC), where developers offer special price discounts, a strategy that has successfully boosted the market in the past. This would also help reduce the overhang of unsold properties. However, as these campaigns result in revenue losses for the government through stamp duty exemptions, the primary beneficiaries should be first-time homebuyers.
While the HOC is a welcome measure for first-time buyers, using it to address the overhang issue raises concerns about sustainability. To tackle this, in addition to conducting more independent and impartial feasibility studies for new developments, targeted incentives could be introduced to convert overhang or even abandoned units into rental properties or worker accommodations. This approach could stimulate demand, improve occupancy and enhance the economic use of these assets, particularly in areas near industrial hubs.
Friendlier loan packages
To make home purchases more accessible, loan availability for first-time homebuyers can be improved by offering flexible loan packages with affordable interest rates, incentivising financial institutions to provide such rates. This effort can be bolstered by refining and carefully implementing programs like the Madani Housing Credit Guarantee Scheme (Skim SJKP-Madani) and the proposed Madani Deposit scheme. Additionally, relaxing some restrictions on foreign property ownership in carefully selected areas could attract international investors, providing a much-needed influx of capital and helping to reduce excess inventory. By implementing these strategies, we can create a more balanced and dynamic property market that benefits both local communities and investors alike.
To improve production efficiency, the adoption of building technologies such as IBS and 3D printing should be further encouraged. The development of pragmatic guidelines and regulations to foster technology adoption, currently spearheaded by CIDB, should be enhanced with stronger engagement from key market players. The focus should be on wide-scale implementation rather than isolated showcases. Through more robust Public-Private Partnerships, the capital burden for these technologies can be shared, creating a win-win solution for private developers and construction players, which will ultimately help reduce overall development costs and lower house prices.
In line with the green agenda and the National Energy Transition Roadmap (NETR), as well as efforts to strengthen ESG practices within the property sector, policies and incentives should promote green building practices and sustainable property and facilities management. Tailored programs for larger-scale commercial and industrial premises, as well as the extensive residential segment involving individual homeowners, should be introduced. While ongoing domestic solar panel programs, such as SEDA’s NEM quota, have made some progress, further grants, subsidies and incentives are needed to reduce the initial capital costs for individual homeowners who are still struggling financially. This should also apply to energy-efficient appliances and domestic water systems, where tax incentives, rebates, or reliefs for such investments could be introduced to both individuals and businesses.
Over-emphasis on primary market
While the focus has typically been on the primary property market, it’s important to note that four out of five residential transactions in the country occur in the secondary market. Enhancing the vibrancy of this secondary segment could provide broad and significant benefits. To stimulate the secondary property market and encourage homeowners to invest in upgrading their homes, a range of innovative strategies could be introduced. One such strategy could involve offering tax incentives for homeowners who undertake renovations, motivating them to improve their properties while incorporating safety and energy-efficiency measures. This reinvestment would not only enhance property values but also foster green initiatives, improve neighbourhoods and contribute to a more vibrant market, making cities more desirable and livable.
Additionally, strengthening the structure of the rental market through the long-discussed Residential Tenancy Act could introduce better protections for both tenants and landlords, further increasing market activity and providing access to better accommodation options. However, the act must be carefully designed to strike a balance between maintaining an investor-friendly free market and safeguarding tenant interests.
Another topic of recent debate is urban renewal, particularly the Urban Redevelopment Act, which aims to revitalise dilapidated city areas and promote the redevelopment of spaces that encourage inclusive community engagement. This would improve the quality of urban living while fostering dynamic, inclusive cities. However, as the proposed act lowers the consent threshold for redevelopment projects, it is crucial that its implementation adequately and equitably addresses the interests of all existing property owners.
As we look ahead to Budget 2025, it is hoped that it will build on the current growth momentum and create more opportunities. The measures announced should foster a more inclusive and dynamic property market that meets the pressing needs of the rakyat in the face of a still challenging global environment. Stakeholders eagerly await the tabling of Budget 2025, expecting measures that not only stimulate market activity but also promote long-term economic growth and social equity.
Sulaiman Saheh is the director of Research at Rahim & Co International, a real estate consultancy firm in Malaysia. If there are any inquiries, please email sulaimansaheh
@rahim-co.com.
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