Mah Sing hopes for fillip from Budget 2020

11 Sep 2019 / 19:57 H.

PETALING JAYA: As Budget 2020 looms, Mah Sing Group Bhd is calling for the government to stimulate the property sector, including more relaxed lending guidelines for housing loans.

In a statement issued today, its founder and group managing director Tan Sri Leong Hoy Kum said loan eligibility has been one of the main challenges in the property market over the past few years.

He recommended the government to allow for a higher debt service ratio of 70% to 80% from the current ratio of 60% for lower income group, and a higher margin of financing of up to 110% for first property, 90% for second property and 70% for third property.

Furthermore, he suggested that income from part time jobs should be taken into consideration in loan application review, as well as the introduction of a longer loan tenure of up to 45 years and lower interest rates for first-time home buyers.

He also hopes for the termination of real property gains tax (RPGT) on properties sold after five years as the move is affecting the higher-priced residential property segment.

“We hope the government could consider terminating the tax as an impetus to boost the secondary market as perpetual RPGT is currently affecting those who are considering to upgrade their homes.”

Meanwhile, Leong urged the government to continue the incentives under the Home Ownership Campaign to exempt stamp duty expenses.

“We hope that the incentives could be continued, especially for the first-time home buyers to lessen their financial burden,” he said.

With that, he took the opportunity to commend the government’s incentive to exempt memorandum of transfer (MOT) stamp duty for residential properties between RM300,001 and RM1 million as a good move to stimulate the industry and reduce property overhang.

In addition to the exemption, Leong recommended the reduction of minimum floor price for foreigners from RM1 million to RM600,000 to reduce the overhang.

Leong hopes that the government could consider reducing the waiting period for bumiputra quota release from one year to six months – capped for residential properties over RM600,000, whilst cutting down on the stages of approval from three to two.

The group also called for a reduction in compliance cost as it remains as the most significant factor affecting developers’ cash flow taking up 20% of the total cost based on findings from Malaysia’s Real Estate & Housing Developers’ Association.

He elaborated that apart from land conversion premiums and development charges, the capital outlay for private utilities companies is very high and such contribution could be shared by the respective asset owners.

“Savings from the reduction of compliance cost can be passed on to the home buyers with a more affordable price point,” he added.

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