How the economy turns out – for better or worse – depends on whether market players, property buyers and the relevant authorities have acted responsibly and watched over its welfare.
The latest concern is that the property market in the region is heating up. China, Hong Kong and Singapore have implemented policy measures to cool their overheating property markets.
Malaysia may follow suit if the rise in property prices widens from the landed housing sector in the Klang Valley and Penang to the other parts of the country.
Undoubtedly, a healthy and sustainable property market will benefit the whole economy as it promotes stronger property values, higher employment and tax revenue, and substantial spill over benefits to the other economic sectors. As such, it is important to ensure the local property market continues to grow and be a productive contributor to the country’s economy.
To achieve that, it is important that the right practices and measures are in place. Getting the basics right is important. And all stakeholders – whether they are property buyers, developers, the regulatory authorities – has a responsibility to ensure the market behaves in a balanced and sustainable manner.
As long as we need a roof over our heads and need to buy or sell property, we are all stakeholders in the property market. Usually a laissez-faire or free market economy is a function of demand and supply. Keeping the market balanced is the best way to go but there are various factors that will affect its balance.
The important attributes for a healthy property market include quality product offerings; ensuring supply matches demand and there is no mismatch in product types; constant flow of products to meet demand; and a healthy financing market. At the fundamental level, the basic tenet for a balanced market is that supply should equal demand.
As the rise in property demand and prices is most visible in Kuala Lumpur and some other parts of the Klang Valley and Penang, the supply line for these markets should keep up with the strong demand. Developers with projects in the pipeline should look into “fast track” development models to churn out more timely products for the market.
Meanwhile, quality should also be emphasised as buyers are more selective these days and do not mind paying more for well-designed projects. In fact, the less hassle for them the better.
That explains why more higher priced projects are in hot demand because buyers don’t mind paying for products that use high quality materials and are renovation-free.
After all, well-designed and wholesome housing estates is one of the basic foundations for healthy families and societies to develop.
In keeping with that, sustainable development should be given more emphasis. If possible uniform standards should be introduced to ensure industry practitioners and the public will more readily embrace green and sustainable development practices and way of life.
Although there is a growing number of property buyers who may be opting for higher priced properties these days, not everybody is able to keep up with the rising prices.
Pro-active measures should be taken to promote home ownership among these people. I believe one of the most effective measures is to have a dedicated national housing board to plan and develop good public housing estates in various parts of the country that have different designs, built-up and price range to cater to the different affordable levels and needs of these buyers. With rising prices of many goods and services, many Malaysians are finding it hard to make ends meet.
They are not just the labourers and bottom ranking workers but include fresh graduates, newly married couples, and middle ranking executives. Instead of building high-density low-cost housing projects, it is better to plan for more medium-priced housing of between RM100,000 to less than RM300,000.
The projects should be in reasonably good and decent locations that have good basic amenities, accessibility and infrastructures. These projects should be given priority and open to all eligible Malaysians who are first time home buyers.
First-time house buyers should be allowed to continue to borrow up to 90% of the property value or even 100% depending on the situation. Ensuring accessibility to loan financing to those who really need them to own their dream home will be a boon to the home ownership campaign. Under Budget 2011, the Government’s proposal to introduce a First Home Scheme with Cagamas Bhd providing a guarantee on the 10% down-payment for houses priced below RM220,000 is a step in the right direction. The scheme will allow first-time house buyers with monthly household income of less than RM3,000 to obtain a 100% loan.
Deputy news editor Angie Ng hopes all stakeholders, including developers, property buyers and the authorities, will give more importance to the sustainable cause.
By The Star (by Angie Ng)
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