Several initiatives under PENJANA to rejuvenate property market - Ministry

The Government through the National Economic Recovery Plan (PENJANA) 2020 has lined up several initiatives to rejuvenate the property market and address the lack of affordable housing particularly for the youth.

According to the Ministry of Housing and Local Government, the initiatives included home ownership campaign (HOC) 2020 whereby housing developers accord house buyers stamp duty exemption and incentive in the form of at least 10 per cent discount on the sale price.

In addition, it said the exemption of real property gains tax (RPGT) which is tax levied upon profit from the sale of property, and current tax reduction could stimulate the national housing market.

"The RPGT exemption is given to Malaysian citizens upon disposal of residential property, limited to three houses per individual, from June 1, 2020 until Dec 31, 2021,” the ministry said in a written reply at the Dewan Rakyat yesterday.

It was responding to Datuk Seri Mahdzir Khalid (BN-Padang Terap) who wanted to know about the ministry's efforts to overcome the lack of affordable housing to meet the people’s needs, especially the youth, considering that the increase in house prices does not match household income, and how far the COVID-19 pandemic has affected market prices.

Further, it said the financing limit for housing loans which is the financing limit ratio offered by financial institutions for property borrowers who have two or more existing housing loans is subject to borrower risk management.

"Under PENJANA, the financing limit for the third and subsequent home loans worth RM600,000 and above during the HOC 2020 period is no longer subject to 70 per cent of the value of the house but subject to the internal risk management of financial institutions," it said.

On the effect of COVID-19 on house prices, the ministry said it does not have the precise information at the moment.

It said based on the Advertising Permit and Developer's Licence registration record, the developer application trend is the same as in previous years without any decrease in developer’s licence applications.

However, it said there was a reduction in residential property transactions of 19 per cent to 47,000 in 2020 compared to 56,000 in 2019, new licence applications totalled 263 (2020) in the first quarter compared to 256 (2019), and first-quarter licence renewal of 603 (2020) compared to 465 (2019).

The ministry attributed the reduction in residential property transactions to housing developers being unable to carry out sale campaigns; limited marketing approaches; and buyers being cautious in making financial commitments.

"However, if looking at the trend in previous years, transactions in the first quarter were certainly less than in the previous quarter.

"In conclusion, programmes and schemes under the ministry as well as the government initiatives through PENJANA may help revitalise the housing industry as well as meet the people's housing needs including the youth,” it said.

Responding to a question from Lim Lip Eng (DAP-Kepong) on the government’s housing initiative to help new markets and secondary markets including foreign buyers during the economic crisis due to the COVID-19 pandemic, the ministry said the matter lay with the state governments.

"The initiative to sell houses to foreigners can be referred to the respective state governments as the prices, quotas and construction for housing including affordable housing and real estate are determined by them,” it said.

-- BERNAMA