Budget 2023 Wishlist: Call for The Government to Alleviate the Homeownership Struggles of Malaysians
Statement to be attributed to Sheldon Fernandez, Country Manager, Malaysia (PropertyGuru.com.my and iProperty.com.my)
Kuala Lumpur, 22 September – As we await the announcement of Budget 2023 this coming 7 October, PropertyGuru Malaysia, Malaysia’s leading property marketplace, would like to take the opportunity to share key priorities on behalf of the property market for the government’s consideration. These will help further spur the property sector and provide Malaysians with the right support to embark on their homeownership journeys.
The upcoming Budget 2023 is themed on Strengthening Recovery, Facilitating Reforms Towards Sustainable Socio-Economic Resilience of Keluarga Malaysia, indicating a focus on elevating Malaysian’s wellbeing, income and social protection, and strengthening the nation’s resilience against future shocks, among others.
More Initiatives Needed to Spur Homeownership
We applaud the government’s move to launch the Malaysia Home Ownership Initiative (i-MILIKI) earlier this year, providing stamp duty exemption for first-time homebuyers. However, based on recent findings in the Malaysia Property Market Report Q3 2022, rental demand made a massive 96.83% YoY jump, indicating that potential homebuyers have resulted to renting in the interim, amid concerns of the rising inflation and Overnight Policy Rate (OPR) increase. Economic uncertainties on the back of the overall recovery in the endemic have made potential homebuyers put a pause on their homeownership plans, while many others have raised concerns over affordability.
Considering this, Budget 2023 should be aimed at making homeownership more attainable for lower to middle-income groups. Affordability issues continue to loom as according to PropertyGuru’s Consumer Sentiment Study (CSS) H2 2022, 51% of the respondents feel that they are unable to purchase a home without government assistance, while 69% of the respondents have indicated plans to buy a home if the Home Ownership Campaign (HOC) is revived.
Amid affordability issues, the HOC has been a great help for many first-time homebuyers and has successfully encouraged activity in a slowed property market. On top of its continuation, we also see that the rakyat may also benefit from the continuation of HOC extending its terms to the secondary market as well. This would help to create demand and further encourage homeownership, providing more options and price points for potential homebuyers if sub-sale properties were included. As part of this, we also hope that the government can consider reducing or removing the stamp duty for residential properties of RM500,000 and below for all Malaysians – to further boost the market.
Property overhang issues also continue to be a concern in Malaysia, where a recent study by Malaysian Industrial Development Finance Berhad (MIDF) stated that residential overhang units increased to 35,592 units in Q1 2022 as compared to 27,468 units in Q1 2021. While the government is working towards providing targeted subsidies to the rakyat, aspiring homeowners would benefit from more schemes similar to the MyHome Scheme, which is aimed at allowing first-time buyers in Malaysia to attain low-cost housing through government subsidies. To address the property overhang issue and further promote an inclusive property market, now is an opportune time for the government to look into providing more schemes with offered subsidies for each home sold. This can be done by giving an up-front subsidy to developers that is inclusive of buyers’ deposit fees and any qualifying payment amount needed to reduce the monthly repayments for homebuyers, and ultimately encouraging them to resume their delayed homeownership plans.
Advancing Environmental Efforts
Amid post-pandemic recovery, the rakyat was also struck by severe floods nationwide, negatively impacting thousands of Malaysians’ livelihoods, savings, and living quarters. The flooding resulted in approximate losses of up to RM6.1 billion, according to the Department of Statistics Malaysia (DOSM), with RM1.6 billion of housing damages recorded.
These events have highlighted a new factor of consideration among Malaysian homebuyers, who, according to the CSS H2 2022, are now worried about how natural disasters and environmental issues will affect their homes in the future. 92% of the respondents in the study highlighted flooding as their main concern, while 83% marked landslides as a particular concern.
While we hope that Budget 2023 will help alleviate the current challenges faced by Malaysians and the property sector, we must not lose sight of ongoing environmental issues, preparedness in facing natural disasters, and the equally crucial long-term agenda of promoting sustainable urban living as well.
In accordance with the 12th Malaysia Plan, which prioritises green and resilient urban development, we urge the government to consider incentivising developers to adopt accredited green certification tools to promote green development in the country and continue to push different industries to do their part in becoming more environmentally friendly. While the impacts of global warming are irreversible, now is the time for organisations and individuals to come together to slow down the effect and reduce the risk of flash floods and landslides resulting from climate change.
However, we note that the cost of constructing green buildings may be higher than traditional buildings, which might deter potential homebuyers from making the purchase. Hence, the government may also consider providing stamp duty exemption for homebuyers who purchase green-certified properties to encourage demand.
We look forward to the announcement of Budget 2023, which will take place on 7 October, and hope that these factors will be taken into consideration not only for the property sector but for the benefit of Malaysians and its future generations. We at PropertyGuru are ready to collaborate with the government and provide them with insights that can help drive Malaysia’s recovery and sustainable growth of the nation’s property market.
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