Budget 2018 Wishlist: Hoping for More Affordable Homes
PETALING JAYA: Every month, communications executive Dhiwenia Subramaniam forks out RM1,700, nearly 30% of her salary, to pay the rent for her apartment in Damansara Perdana just to be closer to her office.
The Penang lass is eager to buy her own home, but high house prices, her existing study and car loans, as well as rising cost of living, mean this plan may take some time to materialise.
"What we need are more affordable homes for those earning RM4,500 to RM6,000.
"Many homes are priced at RM600,000 and above. With a RM6,000 salary, it's still difficult to afford such homes.
"I hope that in the 2018 Budget, the government will announce measures which can help bring down the cost of homes and also address the rising cost of living" she said.
The 28-year old hopes the government would give more discounts for National Higher Education Fund Corporation (PTPTN) borrowers and extend it to all, not just those who pay lump sum amounts.
"Hopefully, more incentives will be given to developers so that they can give first-time house buyers discounts, rather than building affordable homes in areas which people don't want to live in.â€
In recent years, both the federal and state governments have placed emphasis on affordable housing projects, but many still lament the high prices of homes in urban centres, despite property prices dropping by as much as 30% in some areas.
Also hoping to see incentives for affordable housing is the National House Buyers Association (HBA).
The association says Putrajaya should give incentives to private developers to build more affordable properties by lowering the cost of building such properties.
This, HBA honorary secretary-general Chang Kim Loong said, included alienating land for affordable housing projects to developers at a lower price or charging lower conversion premiums for the land, as well as offering "fast track approvalsâ€ for all affordable housing projects.
"Fast-tracking approvals will allow developers to launch, build and sell the affordable properties faster, helping with their cash flow.â€
He also said the private utility companies should take over the laying of utilities such as electricity, water, telephone and sewage for the "last mileâ€ of a housing project, the cost of which is currently borne by developers.
"Developers are not charitable companies. Such costs are passed on to the house buyers in the form of higher selling prices.â€
Chang said the government could also offer tax incentives for developers to build affordable properties.
Be wary of vested interests
Chang also urged the government to be wary of proposals from vested business groups, including any efforts to bring back schemes similar to the Developers' Interest-Bearing Scheme (DIBS), in the coming budget.
He said DIBS, which developers claim will assist first-time house buyers, has been prohibited since 2014 and this must continue.
"The prohibition of DIBS in 2014 has been effective in curbing the unbridled escalation of house prices.â€
Under the scheme, property developers would absorb the home loan interest while a property is being constructed.
But HBA says this will actually push up the price of homes as developers would set higher prices for the properties to cover the cost of bearing the home loan interest.
Chang also hoped the government would not cave into demands to set up a Housing Guarantee Corporation (HGC), which had been mooted in the past to purportedly protect buyers and housing developers if a housing project is abandoned.
The HGC was meant to rehabilitate and save abandoned housing projects, but HBA warned that this would come at the people's expense.
He said under the HGC, the cost of abandonment will be incurred by the government, as it will hold 70% equity in HGC, with private funds forming the remainder.
Chang feared HGC will be seen as a "licenceâ€ for irresponsible developers to recklessly launch new housing projects in large numbers, regardless of their viability, due to the "safety netâ€ provided by HGC.
"It will not solve the problem of abandoned housing projects but will increase them exponentially.
"It will also not resolve issues related to shoddy workmanship, sub-standard materials and timely delivery of homes, among others.â€
Prime Minister Najib Razak is set to table the 2018 Budget on Oct 27 in the Dewan Rakyat.