They hope Malaysia to adopt policies that not only address immediate housing concerns but also lay the groundwork for a sustainable and equitable future in the property market
by GLORIA HARRY BEATTY
PROPERTY industry leaders are urging the government to prioritise strategic initiatives in Budget 2025 that enhance housing accessibility and sustainability, particularly for first-time homebuyers.
Developers and associations are advocating for the reintroduction of incentive programmes, such as stamp duty exemptions and flexible financing options, to ease the financial burden on potential buyers.
They also stress the importance of investing in essential public amenities and fostering partnerships between the government and private sector.
With Budget 2025 approaching, industry players hope for Malaysia to adopt policies that not only address immediate housing concerns but also lay the groundwork for a sustainable and equitable future in the property market.
Based on previous reports, Malaysia’s property transaction value reached RM105.65 billion in the first half of 2024 (1H24), representing a 23.8% increase year-on-year, the highest growth in five years, according to the National Property Information Centre (NAPIC).
This figure contrasts with the RM85.37 billion recorded during the same period last year.
Azmir recommends govt to consider increased incentives for green-certified materials and RE installations (Pic source: Media Mulia)
Sime Darby Property Bhd Group MD Datuk Seri Azmir Merican said optimising contributions and offering flexible payment options will positively impact economic productivity and ultimately housing affordability for Malaysians.
He noted that Budget 2025 comes at a pivotal point for Malaysia, as the country charts a course for sustainable economic growth and fiscal resilience.
The group appreciates the government’s efforts to create a favourable business environment for the property industry and looks forward to measures that streamline compliance and statutory costs throughout the development cycle.
“We advocate expanding stamp duty exemptions for homes above RM500,000 and introducing specialised financing instruments for the bottom 40% income group (B40) and middle 40% income group (M40) communities to ease their path to home ownership,” he told The Malaysian Reserve (TMR).
Concurrently, Azmir recommended the government to consider increased incentives for green-certified materials and renewable energy (RE) installations, as well as modernising the grid to support distributed solar energy.
“Additionally, extending tax exemptions to unlisted real estate investment trusts and incentivising Real Estate Fund Management would drive further investment in socially responsible and Islamic funds, ensuring sustainable growth in the sector,” he added.
To mitigate rising building material costs, Neoh hopes govt would introduce tax incentives for key construction materials (Pic source: trinitygroup.com.my)
Trinity Group founder and MD Datuk Neoh Soo Keat said the local property development landscape faces challenges such as geopolitical tensions, inflation, rising construction costs and regulatory complexities.
These factors are expected to continue impacting the property market in the short and medium term.
Therefore, he urged the government to implement several measures to boost homeownership among Malaysians.
Among others, he hoped for the government to reintroduce the Home Ownership Campaign, particularly a 100% stamp duty exemption on memorandum of transfer for homes up to RM1 million, a 100% stamp duty exemption on loan agreements for qualifying properties as well as offering 100% financing options for first-time homebuyers.
He urged the government to revise debt service ratio calculations to use gross income and to remove the 70% loan-to-value cap for third housing loans and beyond.
Neoh also advocated to reduce development costs, through lowering premiums for land conversions and development charges.
“This will help reduce selling prices, increasing affordability for home seekers, especially lower-income groups and first-time buyers,” he said.
He called for the government to expedite approvals for foreign labour in the construction sector to stabilise workforce demand and address labour shortages.
To mitigate rising building material costs, he hoped that the government would introduce tax incentives for key construction materials.
“This measure aims to maintain affordability in light of escalating costs. By implementing these measures, Budget 2025 can create a more conducive environment for property development and home ownership, addressing the current challenges faced by the industry and potential homebuyers alike,” he said.
Soh hopes Budget 2025 will continue to focus on initiatives aimed at underserved communities, including B40 and M40
PropertyGuru and iProperty Malaysia country manager Kenneth Soh sees opportunities for further measures to enhance the property market and meet Malaysian homebuyers’ evolving needs.
He said the affordability of homes continues to be a central concern for many Malaysians, particularly first-time homebuyers.
The government’s commitment to affordable housing projects through programmes like the 1Malaysia Housing Programme (PR1MA) and Projek Perumahan Rakyat (PPR) remains crucial in boosting the supply of homes in the affordable range.
According to the PropertyGuru Malaysia Consumer Sentiment Study 1H24, PR1MA is the preferred choice for 23% of respondents, especially middle-income earners in their 30s.
Rumah Selangorku was favoured by 15% of respondents, predominantly those married with children, while PPR was chosen by 14%, primarily from the low-income bracket.
Soh urged the government to continue collaborating with financial institutions to offer flexible loan packages, favourable interest rates and periodically revise policies to align with evolving housing demands.
He added that sustainability has become a key focus in global development and Malaysia is no exception.
For homeowners, Soh opined that incentives such as grants for solar panels, energy-efficient appliances and water-saving devices can reduce household expenses while promoting a sustainable, eco-friendly lifestyle.
“Additionally, introducing green home certification programmes that reward sustainable design would further motivate developers and buyers to prioritise environmental considerations,” he said.
Soh also hoped that Budget 2025 will continue to focus on initiatives aimed at underserved communities, including the low-to-middle income segment.
He said tailored assistance programmes, like targeted homeownership grants and low-cost housing projects, can significantly improve the lives of Malaysians in the B40 and middle-income brackets while promoting social equity in homeownership.
He added that affordable rental housing should be a key consideration for those not yet ready or able to buy a home.
“Expanding rent-to-own schemes or creating rental subsidies for lower-income groups can provide secure housing options while helping individuals and families transition to homeownership in the future,” he said.
Soh also urged the government to maintain open dialogue with property sector stakeholders, including developers, financial institutions, buyers and advocacy groups to better address the challenges faced by the property industry.
Real Estate and Housing Developers’ Association (REHDA) Malaysia president Datuk Ho Hon Sang expressed optimism to the initiatives proposed by the Housing and Local Government Ministry (KPKT), which outlined various measures to improve Malaysians’ wellbeing.
He believed that the initiatives proposed would benefit future homebuyers and further spur the property industry.
“This initiative, if announced during the budget presentation, will greatly assist more Malaysians to own homes, meeting the government’s aspiration for every rakyat to have a place to live.
“More often than not, the 10% deposit has been a huge barrier to those without enough savings,” he said in a recent statement.
REHDA also supported KPKT’s proposal to introduce another initiative to help alleviate homebuyers’ financial concerns beyond the monthly payments to their respective banks.
The scheme, similar to the previous Developer Interest Bearing Scheme (DIBS) but with stricter criteria, allows purchasers to retain more reserves for financial concerns like current rental payments, as developers will cover interest costs during construction.
Final details of the initiatives are pending, but REHDA believes that both the Madani Deposit and DIBS scheme should apply only to controlled-priced affordable housing, having no impact on affordable housing pricing.
Ho noted that, in the end, the strategic proposals put forth by KPKT are examples that industry stakeholders should emulate.
“All related stakeholders share equal responsibility to make homeownership attainable for the people,” he added.
The Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector, Malaysia (PEPS) noted that the local property market is expected to stay resilient over the coming years, barring any unforeseen regional or global events.
This is largely attributed to the government’s initiatives aimed at building a strong economy, housing and infrastructure development.
While PEPS acknowledges the government’s renewed focus on affordable housing, it highlights ongoing issues in the industry, including oversupply in the office, retail and service apartment sectors, along with rising building costs due to increased compliance costs.
The association recommends for the government to focus on four main categories, namely affordable housing, Urban Redevelopment Act (URA), property overhang and gazetting of local plans.
PEPS noted that the Madani Housing only tackles the affordable housing needs of the B40 group and below up to the price bracket of RM200,000.
It hopes that the National Affordable Housing Council (MPMMN) will also come up with initiatives and incentives to cater for the M40 for affordable housing above RM200,000 to RM400,000 in Budget 2025.
PEPS pointed out that the main demand for housing in Malaysia is still affordable housing.
It recommends initiatives to ease the burden on housing developers and ensure the success of Madani Housing, including urging Kuala Lumpur City Hall and other municipal bodies to release surplus or idle land for joint ventures with developers.
Under the MPMMN, it recommends for the government to implement the RM30,000 deposit assistance and create a Revolving Fund for first-time buyers of Madani housing by subsidising the down-payment.
“This initiative by the government is commendable. However, there should be conditions that these buyers cannot sell the Madani houses for the next five years upon purchase, except back to the government at cost.
“Only after five years, they are allowed to sell in the open market freely at open market prices, to prevent speculation on Madani housing,” it said.
PEPS also called for swift approval and implementation of URA, which is critical for promoting balanced urban development. It is also vital for addressing dilapidated properties in prime city areas, unlocking opportunities for growth and affordable housing.
As at 1H24, there are 22,642 overhang residential units worth RM14.24 billion, according to NAPIC.
PEPS urged the government to collaborate with the private sector to address this through both short-term and long-term strategies.
The association appealed to the government to consider several approaches and aspects, including short term approach, pricing campaign, medium to long-term approach, data access, data transparency and age of properties.
Source: The Malaysia Reserve
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