Time to impose stronger policies to weed out property speculation

WE have heard all the reasons for the increase in property prices. Land is getting expensive, building materials are costlier and interest rates are low and so on.

Now, Syarikat Perumahan Negara Bhd managing director Datuk Dr Kamarul Rashdan Salleh has said the buying of homes by non-Malaysians was pushing up the price of homes.

There is truth to that but we should not be putting the blame solely on foreigners for the hike in property prices.

Rich foreigners, like their Malaysian peers, will buy luxurious condominiums, sprawling bungalows and expansive semi-detach homes. Those with money will know that property prices in the hot urban areas have surged in recent years and over the long-term, they will stand to make a pretty decent capital return from their investment.

There had been stories of people buying multiple units of homes when they were launched.

Those at the back of the queue would just have to find a house somewhere else after being told the units on sale had all been sold. Urban migration means that this issue will get amplified in the years ahead.

All of this has led to frustration as the dream of owning a home is increasingly escaping most of the low and middle-income segments. Not helping matters is the crawling pace in the construction of affordable homes.

There are homes to be bought in places most of us now will be shaking our heads with disbelief if told that is where we have to live given the price of homes these days.

But why blame foreigners for pushing up home prices and forcing more Malaysians to live in the fringes of big cities when policies do nothing to stop that from happening? Do the number of expatriates and work permit holders mirror the purchases done by foreigners? Or are foreigners buying homes as an investment?

It comes as little surprise that foreigners and Malaysians share the same hurdles when buying a home. Yes, there is a floor price for houses foreigners can buy and the price of most new luxurious homes foreigners might want to buy are above that limit anyway.

If policy makers are serious about at least putting some brakes on foreign money flowing into homes in Malaysia, they should just see what other countries are doing. Singapore has a 10% additional stamp duty on foreigners buying homes and only allows a small number of foreigners to buy landed properties.

Doing that in Malaysia will have its repercussions though. Imagine what will happen to demand for the new upmarket homes being built in southern Johor, especially Iskandar Malaysia, where the focus is on building homes for Singaporeans and other foreigners.

An exemption can be granted for certain projects but on the whole, policies should be strengthened to weed out excessive speculation in home buying.

The real property gains tax should be punishing and maybe there should be a limit to the number of houses a person, Malaysian or foreigner, can buy at a new launch to just one.

Acting business editor (features) Jagdev Singh Sidhu wonders why people can't buy homes in established neighbourhoods instead of paying the same price for a new home so far away from the city centre.

发展商新关仔角加盖超级公寓单位 套现发展密度料多赚千万

槟城21日讯）承建引起争议的“槟州地下国际会展中心计划”（sPICE）发展公司初尝“甜头”，获槟岛市政局提供的额外发展密度已套现在新关仔角一项5亿令吉计的超级公寓发展项目上，发展商在计划下“加盖”上百个公寓单位，从计划中料额外赚取上千万令吉。

天 下没有白吃的午餐，知名产业发展商实达集团有限公司（SP Setia）为槟岛市政局打造槟州地下国际会展中心，而市政局作为回馈，为对方提供额外的1500个额外发展密度，而实达集团也已将其变现在新关仔角的V Residence公寓计划，成为该集团因承建地下国际会展中心下，首个受惠的高档房屋项目。

实达北马区（产业组）总经理邱德忠接受本报记者访问时指出，在新关仔角的V Residence计划原本发展密度为56个单位，唯公司已将其承建地下国际会展中心所享有的1500额外发展密度下的优惠套现在该计划下。

“我 们已将密度从56个增至166个，即增加了110单位，估计公司将从单位获利至少30万令吉”。他说，公司在承建地下国际会展中心耗资3亿令吉，若以市政 局提供的1500单位计，那公司须从每个单位获取至少20万令吉，而在V Residence以每单位获利30万令吉计，获利并非很高。- 光华

PKR leaders speak out against excessive development in Balik Pulau

BALIK PULAU: Two state PKR leaders have lent their voices to a growing chorus of people here objecting against excessive development in Balik Pulau.

Penang PKR vice-chairman Datuk Abdul Halim Hussein said development of luxurious houses in the green lung area of Balik Pulau should be stopped.

“The conversion of agriculture land to housing in Balik Pulau should also be stopped. I feel the development here is excessive.

“Whatever plans that have been approved, it should just stop now. We should look at how to cater to the low-income group by constructing low-cost and low medium-cost housing here,” said Abdul Halim, who is also the State Speaker, during his Hari Raya open house at the Balik Pulau Sports Complex yesterday.

Another state PKR leader, Balik Pulau MP Yusmadi Yusof, lauded the call, saying that Balik Pulau development must take the environment into consideration.

“Development must be environmentally-friendly in which we must preserve our living heritage and the rustic lifestyle of the people here — for example, the Malay villages, the Chinese fishing settlements as well as the mangroves and hills.

“The real challenge is to introduce a relevant urban planning model for Balik Pulau,” he said.

Tanjung Bungah assemblyman Teh Yee Cheu, who is from DAP, had previously spoken out against hillslope development, especially the proposed 49-storey “super-condo” in Batu Ferringhi.

Many Barisan Nasional leaders had also demanded that the state review its development policies, particularly those related to hillslope in view of the dangers to the environment. - The Star

SPNB boss: Foreign buyers pushing up house prices

IPOH: More foreigners are investing in property in the country and this is pushing up the price of houses, making it unaffordable to the average Malaysian.

Syarikat Perumahan Negara Bhd (SPNB) managing director Datuk Dr Kamarul Rashdan Salleh said foreigners had purchasing power and were able to fork out RM500,000 to buy a property, causing developers to mark up prices.

“This creates a kind of false alarm and impression that there is demand for these houses. The middle-income group, especially young adults who need houses to start a family, is facing problems because of this,” he told reporters at his Hari Raya open house here yesterday.

Dr Kamarul noted that many foreigners had invested in property in the Klang Valley, Johor and Penang, resulting in escalating prices.

“The current trend also shows that foreigners are starting to buy property in Malacca and Negri Sembilan.

“However, there should be a balance between offering such high-end property and houses that are affordable to the people,” he stressed.

On the idea of setting a higher minimum price for foreigners, Dr Kamarul said this would be unfair.

“It could also upset the market, and make them lose confidence in the country,” he said.

Dr Kamarul said the Federal, state and local governments should work together to build quality and inexpensive homes, while controlling property prices.

“They can also consider re-developing idle land or increasing the number of areas for building affordable homes.

“They can do it as a joint venture or with SPNB or under Projek Perumahan Rakyat 1Malaysia which are more social-oriented,” he said. - The Star

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槟城产业出售或出租

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Property groups want real property gain tax to remain status quo

PETALING JAYA: The real property gain tax (RPGT) revision which had been one of the highlights of Budget 2012, should be either reverted or adjusted based on proper understanding of the market situation, according to property sector associations.

Real Estate and Housing Developers Association Malaysia (Rehda) revealed in its Budget 2013 wish list that the Government should not review taxation or policies which were beneficial for the industry and recommended the previous RPGT regime be reinstated.

“Under the current market conditions such as the softening market and early signs of better growth of the economy ahead and the uncertainties of the United States and eurozone economy, we urge the Government not to interfere with the existing policies which are business friendly,” Rehda told StarBiz.

With the local Gross Domestic Product announced recently at 5.4%, Rehda believed that Government should grab the opportunity to facilitate market growth by introducing punitive and restrictive measures and suggested the new budget included reverting to the previous RPGT regime of 5% tax if a property is disposed before five years and no RPGT if disposed after five years.

The revised RPGT in Budget 2012 meant that gains from property held for less than two years were subjected to a 10% tax while a 2% was imposed for properties held between two and five years, and those who kept it for more than five years are exempted from tax.

National House Buyers Association secretary-general Chang Kim Loongsided Rehda's recommendation, noting that the current RPGT was not effective in reducing market speculation.

“Developers typically need two years to complete landed properties and three years to complete stratified properties. This would mean that speculators could buy properties from developers, flip on completion and in effect pay the same 5% RPGT rate that was before Budget 2012,” he explained.

The Master Builders Association Malaysia (MBAM) opined that more focus should be put on affordable housing which will benefit more stakeholders and purchasers.

In addition, MBAM wished for the Government to release more land for affordable housing especially in the Klang Valley to meet the demand from first time time housebuyers as well as to sustain the housing and construction sectors.

On MBAM's Budget wish list was also lower coporate tax rate to be on par with Singapore and Hong Kong.

On construction, MBAM pointed out a shortage of skilled workers for heavy engineering like the My Rapid Transit (MRT) project.

“We wish to appeal for skilled workers from China to be allowed to work on these projects as many Chinese workers are now available after completing MRT and high speed rail projects in China,” it said, noting that MBAM would like to source foreign workers from Asean and India too.

With the announcement of the Budget 2013 inching closer, the property sector associations have again reiterated the need for more measures to be taken to supply the market with affordable property.

For the coming Budget, Rehda recommended a closer look into the capital contribution charges on developers that is eventually passed on to housebuyers.

It said that currently developers are required to pay various capital contributions such as sewerage, electricity, water, telecommunications, Construction Industry Development Board levy and surrender of land, construction of facilities and infrastructure as well as compliance of other planning requirements.

Through Rehda's own research, it found that all these compliance costs payable to various authorities could be as high as 30% of the selling price of the housing units.

What Rehda recommended is for private utility companies to not impose capital contribution charges on developers as developers are already required to lay infrastructures in their development projects and bring in new customers to the utility companies.

“These utility companies should revise their own capital and collect revenue via tariff based on consumption,” the association said. -  The Star