#BUDGET 2011* Property consultants welcome efforts to grow housing demand

KUALA LUMPUR: Property consultants have described the Budget 2011 as simple and straightforward while welcoming the government’s efforts to grow housing demand.

Budget 2011was tabled by Prime Minister Datuk Seri Najib Tun Razak on Friday, Oct 15 proposed several initiatives in providing to aid first time home owners. These include the introduction of the Skim Rumah Pertamaku which will provide a guarantee on down payment of 10% for houses below RM220,000, targeted at young adults with income less than RM3,000 and a 50% exemption of stamp duty on instruments of transfer on a house not exceeding RM350,000 for first-time house owners.

“I think this is a good move as this category of people have been marginalized, it will help them move up the ladder,” said Samuel Tan, executive director of KGV-Lambert Smith Hampton in Johor.

Foo Gee Jen, managing director of C H Williams Talhar & Wong (WTW) expects this move to have a more significant impact on housing demand in other cities, especially Johor Bahru, Melaka, Ipoh, Kuantan, but of less impact in Kuala Lumpur where most houses prices exceed the ceiling set by the budget.

However, KGV Lambert Smith Hampton’s Tan noted that while this scheme aids young graduates in obtaining a loan, it does not address how they can repay the loan with a salary under RM3,000 per month.

“It is a good policy that solves one problem but creates another,” said Tan.

The government also reiterated its commitment to the major projects on government lands proposed earlier - the Sungai Buloh development covering 2,680 acres to be undertaken by the Employees Provident Fund (EPF) at a cost of RM10 billion to be  completed by 2025; the RM5 billion Warisan Merdeka situated on 7.2 ha land near Stadium Merdeka which will feature a 100-storey building and the development of the RM26 billion Kuala Lumpur International Financial District (KLIFD).

“The Sungai Buloh development could benefit from this government initiative when it is launched in the future provided the Mass Rail Transit (MRT) system have been implemented,” Foo said.

Adzman Shah Mohd Ariffin, deputy managing director of DTZ Nawawi Tie Leung said the KLIFD and the Warisan Merdeka projects will broaden the boundaries of the Golden Triangle and central business district, and create another value area similar to the Kuala Lumpur City Centre,” he said.

However, Adzman said, the government will have to look at the absorption of the market as the Kuala Lumpur office market is soft.

“There are already new supply in the pipeline, waiting to be filled up by the time these  projects are ready. Hopefully, the government will look into phased development in line with the market demand,” added Adzman.

Zerin Properties chief operating officer Previndran Singhe concurred, adding that while iconic developments are good for the country, he does not necessary thinks it needs to be a 100-storey building.

Praising the budget for being “very people-centric”, Adzman felt the emphasis on infrastructure and allocations for tourism, including the RM85 million allocation to facilitate construction of hotels and resorts in remote areas may result in downstream property investments activity.

WTW’s Foo sees that the government’s provision for infrastructure development such as MRT and highways will make the country more attractive to foreign investors due to easy accessibility as well as help bring property prices up outside Kuala Lumpur,” said Foo.

For Foo, a major disappointment is the lack of effort by the government to liberalize the Malaysia Real Estate Investment Trust (M-REIT) market by abolishing the 10% withholding tax.

It is a sentiment shared by Adzman who said, “We were hoping for tax relief for M-REIT investors as a way to generate more interest in M-REIT and stir up the market.”

For Zerin Properties’ Previndran, another area that is lacking is the legislation of green buildings.

“It should be made mandatory for all new buildings to meet minimum Green Building Index (GBI) guidelines, like what Singapore is doing. This move would take development in Malaysia to a different level,” said Previn.

With the growing number of multinational companies looking to house their offices in green buildings, Adzman said, naturally more people are prepared to pay a bit more for such offices.

“While the government has been encouraging more green developments, I feel that more incentives should be given to developers to ‘motivate’ them further,” added Adzman.