KUALA LUMPUR: A new statutory body that will work with state governments, government agencies and developers from the private sector should be set up by the government to deliver affordable housing in each state, said the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia (PEPS).
The proposed statutory body is a national housing corporation modelled after Singapore’s Housing Development Board that is responsible for the republic’s public housing, said PEPS past president James Wong. The proposal is part of PEPS’ budget wish list.
“The proposed corporation’s role is actually PR1MA’s responsibility, but a lot of feedback we received shows that it is not very effective. For example, the government has targeted a million affordable homes but PR1MA has announced that they will only launch 80,000 homes so far. So we are still short on supply,” he said.
The government has tasked PR1MA with building 500,000 affordable homes by 2018.
PEPS also proposes the release of land suitable for affordable homes currently held by government agencies such as the Waterworks Department and government-linked companies such as Tenaga Nasional Bhd and Telekom Malaysia Bhd.
“In addition, the government can request these institutions to have smart partnerships with developers,” it said.
Besides coordinating the work of government agencies supplying development land and private developers building these homes, the corporation can supply research on the demand and supply of affordable homes in the market.
“Allowing higher residential densities to have affordable housing in special locations along the mass rapid transit line and light rail transit extension lines should be allowed. State governments should also provide lower rates for developers of affordable housing on land-related matters such as subdivision, conversion, title cost and authorities contribution,” said PEPS.
Besides setting up this new corporation, PEPS urged the government to be transparent about informing the public on development plans, bumiputera and non-bumiputera allocated units, applications, status, real-time balloting results and data on affordable housing.
In addition, the base of eligible first-time house buyers should be expanded to include married couples and divorcees. The age limit should also be removed, said PEPS.
“If the banks have problems with single older persons taking up loans, perhaps they should be allowed to jointly purchase their homes with other relatives,” Wong said.
Besides addressing affordability, PEPS has highlighted moves to mitigate a property price bubble through more careful management of housing supply and to eliminate schemes and incentives offered during property launches.
“There is a mismatch of housing supply and demand for certain residential subsectors in certain locations. This could be due to each local authority and municipality acting independently on planning approvals without referring to those of other neighbouring municipalities.
“There should be a coordinating committee to oversee the planning applications and approvals, and a master record under the federal government of what is approved so that supply and demand can be regulated,” said PEPS.
Schemes such as developer interest-bearing schemes (DIBS) should be abolished, the association said.
“We are of the opinion that DIBS distorts the property market and prices and encourages speculation. We are also against developers providing rental guarantee and absorbing stamp duty and legal fees and offering cash-back payments as marketing gimmicks. Doing away with these incentives will help to reduce the developers’ selling price,” it said.
This article first appeared in The Edge Financial Daily, on October 18, 2013.