PropertyGuru outlines proposals to tackle affordability issue in Budget 2018

PETALING JAYA: PropertyGuru Malaysia has made several proposals for Budget 2018 to address the issue of affordability, including an updated guideline on affordable property and increased plot ratios.
“While affordable property may differ from state to state and even location by location, a clearer reference point is needed to support plans for new housing supply, especially in key urban areas such as the city centre,” said country manager Sheldon Fernandez.
He said the definition should include unit size, location, private sector feedback and other considerations in addition to property price.
“There needs to be a clear consensus between the government, the private sector and the rakyat on what is perceived as an affordable home,” he added.
Meanwhile, increasing plot ratios would enable developers to build more units by optimising land use and space, which would subsequently reduce the individual cost of each unit.
Fernandez said that plot ratios should be increased, especially for transit oriented developments (TODs), which would promote home ownership and public transport ridership towards reducing traffic congestion and a more sustainable urban lifestyle.
PropertyGuru also suggested a revision to gross income in loan eligibility assessment, a review of interest rates and special landlord incentives.
“By reverting to gross income, market transactions would increase significantly and almost immediately. But it can be restricted to special groups of buyers such as first-time home owners only,” said Fernandez.
On interest rates, PropertyGuru recommends a reduction of 0.5-1% of interest rates for first-time homeowners buying affordable properties and a special interest rate for first-time home owners if they are buying affordable properties within a specific price range in TODs.
“As we focus on home ownership, there is a need to focus on short-term solutions – providing more rental housing for Malaysians who cannot afford to buy or are saving up to buy but presently need a roof over their heads,” he said.
PropertyGuru recommends special incentives for homeowners who rent to Malaysians on a longer term basis, such as two- to five-year tenancy agreements, for those within a certain age bracket and income level such as the M40.