Knight Frank Advises Against Walled Garden in National Housing Policy
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Putrajaya should not require rent-to-own property from its National Housing Policy to only be resold to the government, said the Knight Frank consultancy.
Knight Frank Malaysia managing director Sarkunan Subramaniam lauded the scheme as a good initiative to help low-income earners secure home via credit scores, but said the Local Government and Housing Ministry’s (KPKT) restriction could be excessive government intervention.
“Whilst we understand that KPKT wants to prevent speculation in affordable homes, but the government directly intervening and purchasing the homes is not advisable.
“As far as speculation is concern, taxation mechanism such as the Real Property Gains Tax (RPGT) and stamp duty are good enough to prevent the situation,” he said.
In the policy launched late last month, the RTO scheme allows buyers to rent their homes for five years and apply for end-financing to purchase it in the sixth year.
Knight Frank also expressed concern towards the proposal to provide micro-housing for low-income unmarried individuals, such as the proposal to allow single people in the B40 group to rent small capsules, at only RM100 per month.
“Single people also require a reasonable amount of space and premises below 200 sq ft is definitely not an ideal choice even for a single owner. Even in Hong Kong, which is known for its unaffordable property prices, several developments featuring shoebox flats, had failed to achieve favourable sales results.
“Therefore, a proper market research is needed to find out the actual demand for this sort of developments. Furthermore, these types of housing are at risk of becoming ghettos and drug dens,” he said.
Sarkunan also praised the National Community Policy for placing initiative in the private sector and Residential Tenancy Act to protect tenant’s rights and avoid discrimination against any races or gender.
He said such initiatives protect both tenants and landlords, noting that many residential tenancy laws in the world tend to favour the former.
However, Sarkunan also said that the National Housing Policy should look into creating a standard policy nationwide in line with current market trends when it comes to Bumiputera quota.
“Whilst land is a state matter, the federal government should try to streamline the Bumi quota and the release mechanism on Bumiputera housing units in all states. For example, the situation in Johor where the Bumi quota is 40 per cent, the slow release is choking developers on their cashflow.”
On the review of the build-then-sell (BTS) policy, he claimed that Malaysia is not ready yet for this structure, it should be free to the developer to decide on the model of the development.
“The structure generally, will increase cost on housing unit, therefore against lowering house prices and affordability.”
Overall, Sarkunan applauds the policies which aim to elevate the public wellbeing by addressing the current housing affordability issues.