Keep PPR Units As Transit Homes For Rent And Not For Sale, House Prices Likely To Increase Amid Hike In Construction, Labour Costs And, More
21st February – 27th February
The National House Buyers Association (HBA) has called for People’s Housing Projects (PPRs) to remain as transit homes for rent, instead of for sale or ownership.
Meanwhile, The Real Estate and Housing Developers’ Association Malaysia (REHDA) revealed that its members will likely raise the prices of their products this year, due to inflation as well as higher cost of labour and building materials.
1. Keep PPR units as transit homes for rent and not for sale
The National House Buyers Association (HBA) has called for People’s Housing Projects (PPRs) to remain as transit homes for rent, instead of for sale or ownership.
HBA’s Honorary Secretary-General Datuk Chang Kim Loong believes the PPR units should be rented out by relevant agencies and used as temporary living quarters for those saving to acquire their own homes, reported the New Straits Times.
He hopes restrictions regarding subletting would be strictly enforced to ensure that the intent in building PPR housing projects is not compromised.
He added that the social benefits and welfare offered to PPR renters should also be evaluated every three years to make sure that tenants do not overstay, allowing new target families to gradually take up residence.
“This is where enforcement must be strict so that those no longer eligible must give way to those deserving ones, but of course not to the extent of throwing them into the streets,” said Chang.
2. House prices likely to increase amid hike in construction, labour costs
The Real Estate and Housing Developers’ Association Malaysia (REHDA) revealed that its members will likely raise the prices of their products this year, due to inflation as well as higher cost of labour and building materials.
However, REHDA President Datuk NK Tong did not divulge the exact increase developers had asked, saying only that it would be a “two digit” percentage hike, reported Malay Mail.
Notably, the survey of 136 REHDA members in the second half of 2022 showed that the three main factors affecting developers’ cash flow were compliance cost, material and labour cost as well as land cost.
As such, developers had implemented various cost-cutting measures such as reducing salaries, freezing recruitment and reducing the scale of their launches.
Overall, developers were more optimistic in 2H 2022, with 66% of the respondents being optimistic and 4% were very optimistic compared to 55% optimistic and 3% very optimistic in 1H 2022.
3. Introduce mandatory pre-tenancy course for PPR residents, says expert
An expert has urged the government to introduce a mandatory pre-tenancy course to raise awareness among prospective tenants of People’s Housing Projects (PPR) of the strata house management system as well as of what can and cannot be done.
Assoc Prof Dr Mona Isa, Senior lecturer of Estate Management at the College of Built Environment, Universiti Teknologi MARA, Shah Alam, pointed that such course is necessary due to the amount of money the government has to spend to repair damaged facilities within PPRs due to vandalism.
“Also, house rentals are low compared to the high building maintenance costs. So the government cannot fully cover these costs. If we cannot change the mentality of the tenants, (then) the problems of vandalism and trash dumping cannot be solved,” Mona told Bernama.
She added that the application criteria for renting PPR units should also be tightened, taking into account the salaries of applicants, no outstanding debts as well as a clean record with Central Credit Reference Information System (CCRIS).
4. Extend credit guarantee to second-hand homes
The National House Buyers’ Association has called for the provision of loan guarantees for second-hand home buyers as well as a review of the stamp duty on transfer of property to family members.
The association’s Secretary-general Chang Kim Loong said the credit guarantee scheme announced under the federal budget should not be limited for new affordable homes but should also cover second-hand homes – which were in higher demand, reported Free Malaysia Today.
This comes as buyers do not invest in new residential projects due to fears of them getting abandoned.
Chang also slammed the exemption for stamp duty on property transfers to family members, describing it as a backward step.
He pointed that people will still be paying a large amount even as duty is exempted for the first RM1 million.
With this, he urged the government to revive the RM10 nominal stamp duty set by the previous government.
5. Penang completes over 50% of its affordable home target
Penang has completed 142,647 ‘Rumah Mampu Milik’ (RMM) affordable housing units, which works out to 57.06% of its goal of building 250,000 such units by 2030.
State Housing, Local Government, Town and Country Planning Committee chairman Jagdeep Singh Deo noted that demand for RMM homes remains encouraging.
“We will be consistent in assisting the people of Penang in need of affordable housing,” he said after visiting RMM Ideal Residency project site within Jalan Lembah.
Developed by Ideal Property Group, RMM Ideal Residency will occupy a 3267.84-hectare site in Bandar Gelugor, featuring 1,218 housing units across a 49-storey tower, reported Bernama.
Facilities at the development will include a swimming pool, gymnasium, community hall, recreation park as well as basketball and badminton courts.
6. REHDA Malaysia express concern over rising construction material prices
The Malaysian Real Estate and Housing Developers’ Association (REHDA) expressed concern that the rising prices of construction materials were not addressed in the 2023 Budget.
REHDA Malaysia President Datuk NK Tong said that if this issue is left unresolved for a long time, it could have a detrimental effect on open-market home prices, reported the New Straits Times.
However, he lauded the government for allocating RM367 million for the development of 12,400 low-cost homes under the People’s Housing Projects (PPRs) as well as RM358 million for the development of 4,250 Rumah Mesra Rakyat under Syarikat Perumahan Negara Berhad.
He also praised the government for including measures aimed at helping the low-income earners, such as the RM5 billion Housing Credit Guarantee Scheme.
Tong noted that while the government’s approach may seem aggressive, they were prudent given the current global economic environment.
7. LBS calls for raw material cost subsidies
LBS Bina Group Bhd (LBS) urged the government to provide subsidies for raw material costs to ease the burden of rising prices among real estate developers and contractors.
LBS Executive Chairman Tan Sri Lim Hock San said the government should explore setting a cap on raw material prices to prevent an astronomical price hike, reported the New Straits Times.
He believes the government has an opportunity to deliver an upswing in property sentiment through stimulus packages in Budget 2023.
Lim looks forwards to initiatives that will be announced by the government, such as the reintroduction of the Home Ownership Campaign (HOC), resolving foreign worker shortage and reduction of financing costs.
He also urged the government to slash mortgage finance rates or provide first-time homeowners with up to 10% rebates to encourage homeownership.
