PROPERTY experts at a round-table discussion on Overcoming Malaysia’s Property Industry Challenges at Budget 2017, held at Menara Star, mutually agreed that the ability to purchase a house in the country is getting weaker, especially for the younger people.

Ekovest Bhd project director Christopher Yeo said many young couples were currently struggling in terms of debts.

“This might be due to their lavish lifestyle where they prefer to spend on holidays and cars.

“This sort of lifestyle can be adapted to more frugal ways. It is important for us to encourage them to buy a house as it is a good asset for the future,” he said.

He added that encouraging home ownership among young people was tough when house prices were escalating, the ability to purchase was weakened by high interest rates, and the eligibility to obtain financing had become stricter.

IWajib Property director Datuk Chew Yin Keen said, in order to encourage more people to buy property, the cost of houses should be reduced.

“There are two things that the Government should look into for Budget 2017, particularly for affordable homes.

“First, the Government should help the property industry by giving 100% GST (Government Service Tax) relief on construction cost. When the cost is reduced, the purchase price will reduce, and thus the ability to buy will increase.

“Secondly, the Government should set up a special fund, so special interest rates can be offered for more housing loans.

“The special interest rate for homeowners can help more first-time homebuyers to purchase a house as it will increase the debt- service ratio (DSR),” said Chew.

Rehda Penang chairman Datuk Toh Chin Leong said many issues needed to be explored and resolved if the Government planned to bring house prices down.

“The general perception of many people is that property is a good industry, and they think that developers are making tonnes of profit out of it.

“However, they are unaware that for the last two to three years, land prices have gone up, government compliance has gone up, and all the construction expenses have also increased because of GST.

“As the cost of development is increasing, the nation cannot expect property prices to reduce.

“There are plenty of things to consider to reduce the price.

“The biggest burden for developers is the cost of subsidies.

“The Government should look at many issues, and not only at bank loans.

“When extra expenses are pushed to developers, who are businessmen, we have no choice but to pass the extra cost down to the end-user,” said Toh.

Rehda proposed two suggestions to overcome the challenges faced by first-time homebuyers.

“We should give Developer Interest Bearing Scheme (DIBS) to the first-time homeowners because this can help them in the long run.

“Many people still do not know that banks are actually charging a higher interest rate for lower-end housing compared to the higher-end, which I think is unfair.

“We also proposed that banks consider offering first-time homebuyers a staggered repayment plan so that they only pay partial amount of what they should each year until they finish paying the full amount.

“These young people are those who just started a new business, just graduated from college, or just started a new job.

“So, we should give them a chance to build up their career first, and make it easier for them to own a house,” added Toh.
Organised by StarProperty.my, the round table discussion was moderated by StarProperty Sdn Bhd acting assistant general manager Ernest Towle.