Govt’s active role in social housing vital

YESTERDAY, Housing and Local Government Minister Datuk Chor Chee Heung said the Government is monitoring the spike in house prices. He went on to say that it will not hesitate to implement measures to keep them under control. This is probably the first time the housing minister has come outright to state a fact that has been staring in our faces the last 18 months or more, particularly for landed units in the Klang Valley, Johor Baru and Penang.

Nevertheless, although the housing ministry has been relatively sanguine about it, Bank Negara has not. Last November, the central bank put in place a requirement for buyers of third and subsequent properties to have a 30% downpayment. Real estate personnel say buyers will adjust to this requirement in due time.

Early this week, Bank Negara raised the overnight policy rate which effectively led to banks raising lending rates by 30 basis points. This effectively will result in banks revising their lending, and deposit rates. Two banking groups have raised their base lending rates and base financing rates by 30 basis points to 6.6% respectively. These rates would affect lending rates of property, automobile and hire-purchase loans, among others.

So far, these are the only two measures that will affect the housing market. While the 30% downpayment was implemented to curb property speculation, the recent rise in interest rates will affect a whole gamut of things over and above more than just housing and the way people are buying into the property market. The raise in interest rates will affect the cost of doing business, among other things.

Housing is a very basic need. It is a terrible thing for a young person or even an older one to have to fork out rental every month, at the end of which, the house does not belong to him, but to the landlord. A tenant is effectively is helping the landlord to finance his housing mortgage. This does not mean investing in property is immoral or unethical. It is wise to invest, and that's a different issue.

With the way house prices are going up, and the way our salaries are not, and the rate of inflation today, those who do not have a property to their name, are not in an enviable position. They are being pressured on several fronts or more the negative effects of inflation on their earnings and savings, their continual need to rent and their continual depleting purchasing power.

In the story on public housing policies undertaken by China (see story below), the Chinese government is pressing developers to go into social housing because this basic social need can turn political. It can be used by ruling and opposition parties.

It is difficult to govern a country of 1.3 billion people. Although they are all Chinese, the Chinese population come from diverse minority groups with different religions, beliefs and communication. That is why the Chinese government uses putong hua or Mandarin, a single common language to unite the people. China looks at social issues very carefully.

Malaysia has a population of about 28 million. It must look at social issues like housing because we have a young and diverse population.

Although Malaysia has, and plan to, improve its social housing for the masses to include My First Home for first time house buyers, this scheme is only a part of the whole affordable housing scheme conundrum that is currently bedevilling this nation. There is also the low-cost housing scheme, which is also a segment of the affordable housing scheme plan. Low-cost housing schemes must also be improved as urban slum is another social problem.

There is a need for the Government to come right out with the logistics, location, pricing and its implementation to ensure the public that there is action behind the words. And to do it soon. Very soon.

While affordable housing is being planned and hopefully implemented real estate professionals are also calling for measures directed at the housing market in the form of reintroducing the real property gains tax on a sliding scale, requiring sellers to pay a stamp duty and not just the buyers and extending that 30% requirement to include the purchase of a second house, instead of the current ruling for the third and subsequent purchase. These measures, unlike the rising of interest rates, would directly affect housing and the speculative nature of this industry.

Assistant news editor Thean Lee Cheng thinks the Government should look at housing for the masses not only from a social stand point but as its duty, much like healthcare and education.

By The Star (by Thean Lee Cheng)

IGB allocates RM3bil for overseas assets

An artist’s impression of Mid Valley City. Tan says IGB has allocated RM500mil for the construction of the third and final phase of the development

KUALA LUMPUR: Property developer IGB Corp Bhd has allocated up to RM3bil for various assets acquisitions overseas this year, said managing director Robert C.M. Tan.

He said the acquisitions comprising mixed developments, including hotels in Europe and the United States, were in line with the company's expansion plan.

“We always look for deals and that's how we grow,” he told reporters after the company's AGM here yesterday.

Tan added the acquisitions would follow the company's successful move in acquiring and rebranding two hotels in New York last year.

Meanwhile, for the third phase of the Mid Valley City development, he said RM500mil was allocated for its construction, which was also the last phase of the commercial development. The construction was expected to commence within the next quarter and would take up to 30 months for completion, Tan said.

IGB is the developer of the Mid Valley City. On the possibility of moving Mid Valley City into the real estate investment trust (REIT), he said the company had no intention of doing so in the near-term.

By Bernama