2015 Budget brings good tidings to property market

Budget 2015 brings good news for ordinary home buyers, but its projects and programmes are not enough to fulfill the housing needs of the entire country, according to Steve Melhuish, Co-Founder and Chief Executive Officer of PropertyGuru Group.

Under the Budget 2015, Prime Minister Najib announced several projects and programmes for the provision of affordable homes. These include building 5,000 units of Rumah Idaman Rakyat and 12,000 units of Rumah Mesra Rakyat (RMR) through Syarikat Perumahan Negara Berhad (SPNB). The agency will also construct 20,000 units of Rumah Aspirasi Rakyat on private lands.

The government will allocate RM644 million to the National Housing Department (JPN) so that it can build 26,000 units under the People’s Housing Programme (PPR). Most importantly, the authorities will construct 80,000 affordable homes under the 1Malaysia People’s Housing Programme (PR1MA) with an allocation of RM1.3 billion.

Notably, the household income cap for PR1MA houses will be raised from RM8,000 to RM10,000, while a rent-to-own scheme will be introduced for those who are unable to obtain housing loans.

"These are welcome initiatives from the government to provide for the Rakyat,” said Melhuish. "However, it will never be enough to provide to the whole nation. Lifting the eligibility threshold for PR1MA houses to RM10,000 is definitely the right thing to do especially for the urbanites as cost of living in cities is much higher compared to suburbs or towns.”

He also lauded the Youth Housing Scheme under Budget 2015, as it would help ease the financial burden of aspiring first-time home owners. However, the number of residential properties available below RM500,000 in key city centres are very limited.

Under this initiative, the government will help young buyers pay off their mortgage instalments by providing a monthly financial assistance of RM200 for each household for the first two years. The authorities will also give a 50 percent stamp duty exemption for the purchase and mortgage agreements.

Additionally, they will provide a 10 percent loan guarantee so that borrowers can obtain full financing including insurance. Beneficiaries can also withdraw from their EPF Account 2 to top up their monthly instalment and other related costs.

However, this scheme is only open to married couples age 25 to 40 years old with a household income of not more than RM10,000. The maximum loan tenure is 35 years, while the price of the property should not exceed RM500,000. It will be offered on a ‘first come first served basis’ and only 20,000 families can avail.

For the civil servants, the government will raise the minimum eligibility of their housing loans from RM80,000 to RM120,000 and the maximum eligibility from RM450,000 previously to RM600,000. On top of that, the RM100 mortgage processing fee will be waived and the authorities will build 5,380 additional houses under the 1Malaysia Civil Servants’ Housing programme (PPA1M) in 2015.

Furthermore, the minimum price of houses offered in PPA1M will be lowered from RM150,000 to RM90,000 per unit with a minimum floor area of 850 sq ft, while qualifying monthly household income will be increased to RM10,000 from RM8,000 previously. The authorities will provide a facilitation fund of up to 25 percent of the project cost for housing developers participating in the scheme.

On this Melhuish remarked: "Good initiative for civil servants to provide them a decent living standard and secure future for their families too. This is indeed necessarily especially for outskirt areas and to lift the standard of living to a higher level.”Source – PropertyGuru

Source – PropertyGuru