Foreigners, with their higher currency exchange, are competing with the locals in the landed housing market.
THE hike in property prices of the last two years should be a good enough reason to pull out all the plugs that have stifled home ownership among the people.
House prices in the property hot spots of Kuala Lumpur, Petaling Jaya and Penang have way surpassed the affordability level of the average Malaysians and more proactive measures are needed to extend a helping hand to them.
The latest statistics contained in the Property Market Report 2011 by the National Property Information Centre showed that average house prices climbed 6.6% in the fourth quarter of 2011.
Deputy Finance Minister Datuk Donald Lim rightly pointed out that the Government was worried of the emergence of a real estate bubble and did not want a United States sub-prime mortgage crisis in Malaysia.
The situation has to be addressed urgently before the high property prices cause more hardship to the people. Any further hike in housing prices will aggravate the climbing cost of living and derail efforts to promote home ownership.
Bank Negara's measures to rein in rising property prices and deter speculative property buying, including a maximum loan-to-value ratio of 70% for third-time mortgage borrowers and using net personal income calculation instead of gross income to decide on the quantum of loan approved, are showing results.
Banks should be prudent in their lending practices and if the speculative buying persist, tighter lending measures, like a further lowering of the LVR for multiple mortgage borrowers, should be implemented to nip property speculation in the bud.
However, first-time house buyers should be made a priority sector and they should be granted full financing if they met the lending conditions.
To ensure the home ownership programme will be a success, the efforts have to be undertaken holistically with the ultimate objective of making it easy and affordable for all households to own at least a home each.
The programme needs a masterplan that looks into the overall supply and demand scenario in the property market, and should not be undertaken on a piecemeal basis.
Given the importance of the family unit to the well-being of the country's social fabric, ensuring that every household has at least a house of their own will have many spillover benefits for the overall good of the country.
To address the supply side, sufficient land should be allocated to be developed into affordable housing townships that offer well-planned housing units priced between RM200,000 and RM400,000.
Instead of having different authorities or agencies, a dedicated umbrella body in the like of a National Housing Board should be responsible for all the Government's affordable housing initiatives to plan and execute projects for the 1Malaysia Housing Scheme and My First Home Scheme.
A closer scrutiny on the demand side points to the fact that besides strong buying interest by local purchasers, there has been an influx of foreign buyers, including from the Middle East and China, who have been snapping up local properties, thus contributing to the sharp spike in prices.
The situation is further compounded by the market cooling measures undertaken by governments in Singapore, China and Hong Kong to stem price hikes in their property markets.
Besides making it difficult and costly for their own nationals to buy multiple properties, strict conditions have been meted out on foreign buyers.
Last December, Singapore imposed a 10% stamp duty on foreign buyers to control the high number of foreign purchases.
The aim is to prevent property prices from boiling over which may lead to mayhem in the market should a property bubble happen.
Having seen the effect of the spiralling property prices in raising the cost of living,
I believe the holistic measures to contain property prices in our country should include some form of curbs on purchases by foreigners.
In view of the strong interest for landed housing units and sharp price hikes in this product segment, foreign purchasers should be disallowed from buying landed residential properties, except the super high-end ones.
Like in Singapore, landed housing projects, except the super high-end projects on Sentosa island, is made a critical sector that is only exclusive to the local buyers.
Foreigners should only be allowed to buy high-rise properties that are priced at more than RM1mil and multi million ringgit landed housing.
With these measures, the foreigners with their higher foreign exchange advantage will not be competing with the locals in the high demand landed housing sector which is one of the reasons driving prices to the current high levels today. - The Star
> Deputy news editor Angie Ng subscribes to the age-old wisdom of “charity begins at home” and hopes all Malaysians will live as a big happy and supportive family.
